LONDON (Reuters) - Investor confidence sank to its lowest level in at least nine years in December, sapped ahead of the new year by fears of continued credit turmoil and a deteriorating world economy, State Street said on Tuesday. U.S. investors were particularly negative. The U.S. financial services firm said its global State Street Investor Confidence index sank to 65.9 from 75.8 in November, upwardly revised from 74.3.
LONDON (Reuters) - Investor confidence sank to its lowest level in at least nine years in December, sapped ahead of the new year by fears of continued credit turmoil and a deteriorating world economy, State Street said on Tuesday.
U.S. investors were particularly negative.
The U.S. financial services firm said its global State Street Investor Confidence index sank to 65.9 from 75.8 in November, upwardly revised from 74.3.
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It was the lowest reading for the index since it was first compiled in September 1998. Second lowest was a brief dip to 72.1 in February 2006.
"Global investor confidence established a new low, cementing the evidence that investor risk appetite has been strongly impacted by the one-two punch of the August and November credit crises," said Harvard Professor Ken Froot, a co-developer of the index.
"In very recent days, we do see institutional investors following more of a holding pattern than a selling pattern, but the overwhelming conclusion from the data is that they are much more skeptical about fundamentals than they were in the first half of the year."
State Street compiles its index based on asset movements among its institutional investor clients whose $15.1 trillion it keeps as custodian.
It said North American investors were again the key drivers behind the decline with their regional confidence index falling to an all-time low of 65.3 from 75.4, previously 78.9.
"The North American pessimism is mirrored almost exactly in the behavior of US Consumer Confidence over recent months, the first time since 2003 that we have seen such congruence," said State Street's Paul O'Connell, also a co-developer.
The European index rose to 85.0 from 83.9, previously 84.0. Asian investor confidence fell to 85.8 from 86.6, previously 86.9.
Global investors have been jolted since summer first by fears over the financial sector's exposure to risky loans and then by signs of an economic slowdown in the United States, Europe and Japan.
Inflation worries have now joined the mix.