State Street investor confidence index falls

Global investor confidence in October decreased by 17.5 points to 58.2 from a revised September level of 75.7, with the drop particularly dramatic in North America, according to an index partly developed by a unit of State Street Corp.

The index is compiled by State Street Global Markets, the investment research and trading arm of State Street Corp., the Boston company that provides financial services to institutional investors; the index is partly based on research from Harvard University professor Ken Froot.

State Street Global Markets said in a press release today: "Confidence among North American investors fell particularly sharply from a revised level of 75.1 to 50.8. Elsewhere, the declines were less dramatic, with European confidence falling just 1.5 points to 79.6, and Asian confidence declining 0.6 points from 87.1 to 86.5."

Included in the release was a statement from Froot, who said: "This month we saw a dramatic and unprecedented decline in investor confidence to a new record low, led by investors in North America. We saw broad and important reductions of risk across investor portfolios previously at times like the Asian Crisis in 1997 and the Russian-LTCM crisis in 1998. However, even the strong broad-based selling of risk we saw during those events appears small compared with the current outflows. The combination of financial crisis along with truly global macroeconomic risk of deep recession has been causing a complete re-evaluation of risk across a wide investment community centered on US institutional investors."
(By Chris Reidy, Globe staff)