UK Is Most Preferred European Stock Market by Far in BofA Poll

(Bloomberg) -- Britain’s stock market is now by far the most preferred among European peers, according to a regional survey by Bank of America Corp.

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The share of investors indicating they would be overweight UK equities over the next 12 months jumped to more than net 30% from less than 10% in July, the poll showed. Participants also favored Swiss stocks over those in Italy, France and Spain. Germany was the least preferred, with more than net 30% of respondents saying they would be underweight the country.

The survey cements a rotation into the UK shown in last month’s data, and comes as recession worries jolt global financial markets. London’s blue-chip stocks are perceived as good bets during periods of volatility due to their so-called defensive nature. The large-cap FTSE 100 Index is nearly unchanged in the past month, while the Stoxx Europe 600 Index and the S&P 500 Index have declined more than 4%.

It’s a big turnaround from 18 months ago, when UK stocks were the most disliked globally, according to the same BofA poll. That came as the country faced runaway inflation, an energy crisis and after former Prime Minister Liz Truss’s unfunded tax cuts fueled a sharp selloff in British assets.

Investors had turned more confident about the UK’s political stability following July’s election win for Keir Starmer’s centrist Labour party, while data today showed UK unemployment fell unexpectedly in a sign of underlying strength in the economy. France, meanwhile, is still in the midst of a political crisis, while data today showed that investor confidence in Germany’s economy plummeted to its lowest level since January following a disappointing run of data.

BofA’s poll was conducted between Aug. 2 and Aug. 8 and canvassed 122 participants with $265 billion in assets.

--With assistance from Michael Msika.

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