Private investors in Britain have turned bearish on every sector of the stock market, according to a new analysis of share-trading behaviour.

Small punters dumped a net £1.3 billion of their shareholdings in April and May and even turned their backs on utilities and telecoms and healthcare, the two defensive sectors where, until now, they had been net buyers.

The flight from equities was recorded by Capita Registrars, which said that the pattern suggested that private investors believe the four-year bull market to be over.

Small investors began to be net sellers last October and have sold a net £6.9 billion of shares since then – ordering twice as many share disposals as purchases by value.

The biggest net disposals in April and May were in financial stocks – banks and insurance companies – where small investors sold a net £380 million-worth. Other big sell-offs were recorded in the oil, gas and commodities sector and in industrials, where investors sold a net £300 million and £290 million respectively.

The capitulation in defensive stocks saw a net £175 million of healthcare stocks sold off and a net £20 million pulled out of the utilities and telecoms sector.

John Roundhill, director of Capita, said: “The latest period stands out as no sector escaped the private investor sell-off. Usually, we would expect to see some selective buying, too. But this is not a rout. The volume of trading is the lowest in a year.” After adjusting for the different size of each sector, industrials and information technology were the least favoured.

In evidence that it may have been a thin time for retail stockbrokers, just £1.3 billion of shares were estimated to have been traded by private investors. Purchases dried up almost completely, Capita said.

Mr Roundhill added: “The bull market has passed its four-year anniversary and private investors have been taking the opportunity to raise cash from their shareholdings.”

Private shareholders seem to have been anticipating the recent rise in long-term interest rates, he said, ahead of the professionals, who have only just turned bearish.

Private investors now own an estimated £226 billion of equities, equivalent to 12.1 per cent of the FTSE 350 index of Britain’s 350 biggest listed companies. That is down from 12.3 per cent in September 2006.

Capita is a leading registrar for publicly listed companies and scales up its own data to build a picture for the stock market as a whole.

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