State Street says its Investor Confidence Index has dipped in June. According to the index, investor confidence declined by 6.4 points to 85.5, from a revised May 2004 reading of 91.9. Developed by Harvard University professor Ken Froot and Paul O’Connell of State Street Associates, the index shows that institutional investors continue to be sceptical about the outlook.
“Investors continue to adjust downwardly the risk of their portfolios in the face of prospective monetary tightening,” says Froot. “Our index indicates considerable selling of equities and suggests that last month’s interest rate decline may have been a consequence of that selling.” O’Connell added that the most recently collected data indicated selling of risky assets by institutions in the majority of the markets that underlie the index.