(Bloomberg) -- Europe's stock laggards are winning over money managers who are pulling out of one of the year's best-performing markets.
Global funds have trimmed their positions in Italy ahead of the country's elections, while boosting their U.K. holdings, strategists at HSBC Holdings Plc wrote in a note Wednesday. While the FTSE MIB Index has rallied more than 7 percent in January, a strengthening pound has dragged down Britain's exporter-heavy FTSE 100 Index by 1.3 percent.
“Growing uncertainty relating to the outcome of the Italian general election on March 4 appears to have resulted in a big change in global funds' positioning in Italy,” HSBC strategists led by Amit Shrivastava wrote. The country's equities have fallen more than the broader Stoxx Europe 600 Index this week, after a rally driven by economic optimism and receding concern about bad bank loans.
After muted flows in the final quarter of last year, European equity funds are seeing a “big turnaround” in 2018, HSBC says, noting that investors have poured in more than $22 billion -- the highest across major regions.
To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net.
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Paul Jarvis
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