A global indicator shows a mixed picture on the direction of investor confidence in Asia and other parts of the world.

Investor confidence globally took quite a tumble in July, dropping by nearly 10 per cent since the month before, according to the latest State Street Investor Confidence Index reading.

Overall, the index dropped by 12.5 points to 114.6, down from June’s reading of 127.1.

Sentiment in North America took the biggest turn for the worse, falling by 20.6 points to 122.6, but also declined in Europe, by 2.1 points to 100.4. On the other hand, investor confidence inched up in Asia – by 2.6 points to 89.5 (which is still a lower reading than the other regions).

“A weaker earnings season in the US and greater uncertainty on the global growth front were the likely factors driving the sharp decline in North American investor sentiment in July. However, despite this pull back in sentiment, it is important to note that investors remain largely optimistic as the North American ICI remains still well above 100 level,” said Ken Froot, one of the two developers of the index.

“The rollercoaster ride across China's equity markets and the absence of a definitive Greek bail-out agreement has certainly weighed heavily on risk appetite with our Global ICI slipping by 12.5 points, the largest monthly decline since 2009,” said Jessica Donohue, executive vice president and chief innovation officer at State Street Global Exchange.

“While the aggressive response of the Chinese authorities to calm investors' nerves seems to have had a net positive effect on sentiment within the region in the month to 22 July, the continued volatility in equity markets highlights how temporary such measures can be,” she added.

The Investor Confidence Index was developed by Froot and Paul O’Connel at State Street Associates, which is the research and advisory business of State Street Global Exchange.

The index is based on the actual trades, rather than the opinions of, institutional investors.