This was mainly driven by the 17.8 point decline in sentiment in North America, which pushed the North American ICI strongly into pessimistic territory at 86.5.
Confidence amongst European institutional investors on the other hand increased 10.2 points, raising the European ICI to 111.9.
Asian investor confidence remained steady with the Asian ICI rising 0.9 points to 96.2.
President and partner at FDO Partners, LLC Paul O’Connell said the fiscal showdown in the United States negatively impacted institutional investor confidence, pushing the global ICI into negative territory for the first time since May.
“Notwithstanding the 11th hour resolution of the immediate crisis, investors are aware that the long-term fiscal policy of the United States remains to be negotiated, and that the impact of such negotiations on growth and confidence is yet to be seen,” said Mr O’Connell.
Head of cross strategy research at State Street Global Markets Michael Metcalfe said the fact the North American ICI experienced a record fall in the same month that Europe posted its largest gain in almost three years showed how policy perceptions were changing between the two areas.
“With European confidence at its highest level since July 2007, investors hope the worst of the Eurozone crisis is past,” said Mr Metcalfe.
“The US crisis of confidence, in contrast, may just be the beginning unless policy uncertainty is reduced,” he said.
The ICI measures investor confidence by analysing the buying and selling patterns of institutional investors. The index rises when investors increase their long-term allocation to risky assets and falls when they decrease this allocation. A reading of 100 is neutral.
