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Majority of retail investors expect further FTSE 100 falls in coming month


New research from ETF provider GraniteShares reveals that with the current turmoil caused by coronavirus, 57 per cent of UK retail investors expect the FTSE 100 to fall further over the next few weeks.  Just 12 per cent expect it to rise, and one in four (25 per cent) are unsure what it will do.  Alarmingly, 31 per cent expect the index to suffer from a double-digit percentage fall during April.

In terms of those retail investors who expect the FTSE 100 to fall, 59 per cent said it will be because the impact of the virus will get much worse, followed by 54 per cent who say it’s because there will be more economic and social unrest as businesses go bust as a result of the virus. Just over half (52 per cent) say it’s because the negative impact on the economy will become clearer.    

Some 44 per cent of those who expect the index to fall say it will do this because investors will panic more over the next few weeks, and one in five (20 per cent) of those who expect it to drop say it fall due to actions from governments and central banks increasingly not working. 

Of those investors who expect the FTSE 100 to rise over the next four weeks, 53 per cent say it will be due to a clearer picture developing in terms of when we will be through the worst of the pandemic. This is followed by one in three (33 per cent) who say it will rise because we will develop more knowledge of the virus and greater control over it.  Some 32 per cent of those investors expecting the index to rise say it will be due to investors increasingly realising how undervalued some stocks are, and they will start investing more.

Will Rhind, founder and CEO at GraniteShares, says: “Our research shows investors still expect a lot of volatility in the markets.  Those that anticipate further falls can hedge against this risk, while for those investors expecting a rise further falls may be seen as a good buying opportunity.”

GraniteShares commissioned market research company Consumer Intelligence to carry out the survey, conducting online interviews with 1,025 people between 27 and 30 March, 2020.

“Our leveraged and inverse ETPs enable sophisticated investors to take positions on both rising and falling share prices.  They can also be used to hedge individual stock exposures, including those in index or fund holdings,” adds Rhind. 

GraniteShares’ daily ETPs are providing long and short exposure to a selection of major companies listed on the London Stock Exchange.

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