Investor sentiment highest since last April

Investor sentiment highest since last April

Investors are shrugging off geopolitical uncertainty and feeling more confident about their prospects than at any time since last April, according to a study.

The Investor Sentiment Index from Lloyds Private Bank stands at 6.1 per cent, compared with 2.38 per cent this time last year.

It has risen 0.43 percentage points since last month.

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However, while investors are bullish about gold, Japanese shares and commodities, their confidence in US and Eurozone shares remains low.

Despite the positive outlook, traditional safe haven asset gold is the biggest riser in sentiment.

Markus Stadlmann, chief investment officer of Lloyds Private Bank, said that gold's rise "would suggest that investor optimism is tempered somewhat by the need to shield against persistent geopolitical uncertainty." 

Gold now has a sentiment score of over 43 per cent, up 5.6 per cent.

Investors are also feeling more positive about UK property, after sentiment slumped following Britain's vote to leave the European Union.

Over a twelve month period, sentiment about the asset class has declined by 17.55 per cent. However, it rose by over two percentage points on a month-on-month basis. 

Confidence in Eurozone shares is now at minus 34 per cent, down 3.84 percentage points year on year, while confidence in US shares is down 0.8 per cent.

"Despite Eurozone shares returning the lowest sentiment score once again, we remain more optimistic than some of our peers about the health of European corporates and the Eurozone economy as a whole. Conversely we share investor caution towards US shares, having observed early indications that US corporate profits may have peaked, and in some cases are now in decline," Mr Stadlmann said.

Sentiment on Japanese shares has risen 22.4 percentage points year on year, and now stands at 5.44 per cent, while commodities have also experienced a surge in confidence, up over 23 percentage points to 15.54 per cent.

"The uplift in sentiment towards commodities is interesting to note, but for the time being we have yet to see enough of a fundamental recovery in supply and demand to consider reintroducing it to our client portfolio benchmarks," Mr Stadlmann said.