U.K. stocks and bonds are trading at their lowest levels in decades.
Even that hasn’t been enough to entice investors back into the market.
Since Liz Truss won the race for prime minister in early September, the U.K.’s FTSE 250, a broad index of domestically oriented stocks, has fallen more than 7%, outpacing losses for the Dow Jones Industrial Average and S&P 500.
Tweet on U.K market turmoil
U.K. Markets Are On Sale, the only problem though, no one is buying!!
Valuations on U.K. stocks and bonds are at historic lows, yet investors remain wary over gov’s borrowing plans and the end to the BOE's bond buying rollercoaster, via @Bloomberg
chart by @FactSet pic.twitter.com/lK9MErGFtA
— The_Journalbiz (@the_journalbiz) October 18, 2022
FactSet chart on U.K market fluctuation
The yield on 10-year U.K. government bonds surged this month to its highest level since 2008. Meanwhile, sterling is hovering at its lowest level against the dollar since 1985.
Investors yanked a net total of $3.7 billion from U.K. stock mutual and exchange-traded funds in September, an all-time monthly record, according to fund tracker EPFR.
Meanwhile, a September survey from BofA Global Research showed fund managers are the most underweight U.K. stocks in nearly two years.
Sentiment also isn’t looking much better for the British pound, which has seen continued bearish wagers against it.
“It’s an untouchable market right now,” said Viraj Patel, a London-based global macro strategist at Vanda Research. “You could easily make a case where things get progressively worse from here.”
An October survey from BofA Global Research shows that a net 33% of global investors say they are underweight U.K. stocks, up from 24% last month and the highest share since November 2020