State Street Global Exchange has reported that the Global ICI decreased to 108.8, down 1.7 points from December’s revised reading of 110.5.
The decline in sentiment was driven by a decrease in the North American ICI from 110.5 to 108.8 along with the Asian ICI falling 1.5 points to 102.9, and the European ICI falling 0.1 points to 103.4, the report shows.
Unlike survey-based measures, the index is based on the actual trades, as opposed to opinions, of institutional investors, State Street noted.
“We have seen an unprecedented slide in stock markets around the globe,” commented Jessica Donohue, executive vice president and chief innovation officer, State Street Global Exchange.
“Tumbling oil prices, a reaction to slowing demand in the face of a supply glut, and changing growth dynamics in China chipped away at investors’ confidence over the past month.”
“Fears around weakening Chinese growth and the collapse in oil markets have caused institutional investors to believe the additional spending released into the hands of consumers in non-commodity producing countries makes even this steep and sudden downdraft a buying opportunity,” commented Harvard Professor Ken Froot, who helped develop the research model used by the index.
“Perhaps 2016 will be a happy new year after all.”