You are here: Home - Investing - Experienced Investor - News -

Investor confidence on the rise, but ‘Brexit-shaped dent’ remains

Written by: Adam Lewis
After dipping in the immediate aftermath of Brexit, investor confidence in the prospects for equities rose in August according to the latest Hargreaves Lansdown Investor Confidence Index.

Falling to a 67 reading in July, confidence soared 19% to hit 80 in August. However this remains a long way off the pre-Brexit level of 92 and the long-term average of 101.

Breaking the index down by regional scores, whereby a 50% score represents positive sentiment, confidence rose most significantly for the prospects for UK shares, with a 7.5% swing from 52.5% in July to 59.8% in August. However while the UK saw the biggest swing in positive sentiment, overall confidence remains highest for the prospects for US shares, with the August reading standing at 62.8% (up 0.8% from July).

Laith Khalaf, a senior analyst at Hargreaves Lansdown, notes while sentiment has improved there remains “a Brexit-shaped dent in confidence”.

“The sharp fall and subsequent recovery in confidence underlines how volatile sentiment has been in the last few months, and why it’s a particularly inappropriate time to be hanging too much significance on one or two data points,” he says.

Outside of the UK, investor confidence in European shares did show some improvement in August, although at 47.3% it remains modestly negative. After the US, confidence was highest in global emerging markets, while month-on-month there was a small decline in sentiment towards Japanese equities.

Khalaf says: “Investors remain most confident in the US stockmarket despite relatively high valuations, which is understandable seeing as economic growth and monetary policy appear to be going in different directions on either side of the Atlantic.

“The UK stockmarket is still trading near its long-term historical average, and looks attractive when compared with government bonds, some of which have traded at negative yields in recent days, offering investors the dubious privilege of actually paying for the privilege of lending money to the UK government.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week