ING Index reveals improving sentiment

Eric Siegloff

Markets remain highly volatile and returns may be in decline, but Australian investors are showing a good deal more optimism than their counterparts in Asia, according to the latest ING Investor Dashboard Sentiment Index.

The Index, released today, revealed that Australian investor sentiment had risen 18 per cent to 105 for the second quarter of this year, up from just 89 in the first quarter.

However, ING said that even though the jump is significant, 105 is in the neutral range of the index and well down from the 131 recorded in the final quarter of last year.

ING’s analysis of the index suggests that Australian investors are cautiously optimistic about the economy and the stock market for the third quarter of this year.

Commenting on the index, ING Investment Management chief investment officer Eric Siegloff said the world backdrop was one of slowing economic growth and that in this context, Australia’s gross domestic product growth was expected to slow to 2.5 per cent over 2008, which was quite robust when measured against its peers.

The ING survey found Australian investors had mixed views on the outlook for the US economy, with 17 per cent believing it would improve in the third quarter but 54 per cent expecting their investment decisions to be impacted by the state of the US economy.

Interestingly, some 36 per cent of investors believe the Australian stock market will rise in the third quarter, while 30 per cent believe it will decline.