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Investor confidence plummets after Brexit vote

The British vote for Brexit has seriously affected the confidence of institutional investors across the globe. In July, State Street’s Investor Confidence Index dropped to such an extent that institutional investors globally are now decreasing their allocation to risky assets.


PA Europe

The drop in sentiment was, unsurprisingly, strongest in Europe, decreasing from 100.3 (an almost neutral reading) to 92.4. North American investor confidence also fell into negative territory to 99.9 points. Asian investor sentiment went down considerably too, but it stayed in positive territory at a score of 108.

“The numbers this month signalled unequivocally a decline in institutional investor confidence. Not surprisingly, risk aversion surged as market participants grappled with the wider implications of Brexit and Turkey’s recent geopolitical turmoil,” commented State Street’s Ken Froot.

“Global growth prospects, while being already lacklustre, have worsened, and institutional investors responded by putting the accumulation of risky assets on hold,” he added.