Hargreaves Lansdown, one of the UK’s largest independent financial advisers, says confidence in European stock markets is the lowest among investors it surveyed.
Europe saw a decline in confidence in May, albeit of only three percentage points to a reading of 56.
However, the firm’s investor confidence index showed that confidence increased for all other markets worldwide despite escalating trade war tensions between the US and China.
The index also showed that sentiment was stronger toward global markets than to domestic markets, aside from Europe which sits “at the bottom of the pecking order”, according to Laith Khalaf, senior analyst at the firm.
This is reflected in the latest figures for the funds industry showing a continued trend of outflows from UK and European funds as investors seek to put their money elsewhere, he said.
Overall, the index reached 80 points, up from a record low of 52 in December. Despite this increase – and sitting comfortably ahead of its 12-month average of 68 – the index is still below the ten-year average of 91.
Confidence in the European market decreased from 59 points in April to 56 points this month, placing the market firmly in last place in the index.
“Investors are probably reserving judgement on the direction of markets until we break out of the current holding pattern on Brexit, which looks like it may happen next month, though we probably shouldn’t hold our breath,” Khalaf said.
Another finding of the index was that confidence in global emerging markets increased from 109 points in April, to 114 in May.
Hargreaves Lansdown surveyed around 500 of its clients for the index, all of whom are UK retail investors.
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