Investors more confident in Asia Pacific and Europe region than UK and US
(ShareCast News) - UK investors are most confident about backing the Asia Pacific region and global emerging markets more than the UK stock market, according to new research.
According to the monthly investor confidence index from Hargreaves Lansdown, confidence in the Asia Pacific excluding Japan region gained a score of 69.3% while global emerging markets not far behind with 68.8%.
Confidence in the UK stock market was lowest at 56.8%.
In between were Europe on 69.7%, Japan on 59.8% and the US on 58.3%.
Laith Khalaf, a senior analyst at Hargreaves, blamed pessimism towards the UK stock market on investors being wary about the short term prospects for the UK stock market, partially due to national economic growth falling and consumer incomes being under pressure.
Sentiments towards US shares, on the other hand, were still positive but waning, down from 69.7% at the beginning of the year to 58.3% in August, while the European stock market enjoyed a resurgence from 49.0% at the beginning of the year to 64.3%.
Khalaf said that investors were more positive towards overseas markets than the UK momentarily, possibly due to Brexit and a large chunk of the UK's globally "well-diversified" stock market earnings coming from abroad.
In addition, the report also highlighted that expectations of an interest rate rise edged back with 20% of respondents expecting a rate hike in the next six months from 45% in July, due to inflation falling back, economic growth faltering and the Monetary Policy Committee proving more dovish.
Overall, the investor confidence index climbed seven points this month, from a reading of 69 in July to a reading of 76 in August, which Hargreaves pointed out was "well below" the long term average level for the index of 99 points.