Investor confidence hit by Cyprus, North Korea

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Events in Cyprus and North Korea have cast a cloud over the investment outlook in recent weeks as new research reveals a slump in confidence despite resilient markets.

Just two-thirds of investors surveyed in the latest Hargreaves Lansdown Investor Confidence Index feel positive about the UK stock market, down from 71 per cent in December. Less than half of investors think the UK stock market will be higher in six months than it is now, the research found.

Investor confidence has been dragged down by the financial crisis in Cyprus, with the political situation surrounding North Korea adding to that uncertainty, said Hargreaves.

The Cyprus bailout debacle helps explain why investors are more negative about the outlook for Europe than any other area, said Adrian Lowcock, senior investment manager at Hargreaves Lansdown.

“Investors remain wary of investing in European companies, with only 28 per cent of people surveyed thinking the outlook for Europe is positive over the next 12 months,” he said.