Equity research departments around the world have become much more bearish since the start of the year, but US analysts remain markedly more bullish on stocks than peers elsewhere.

Analysts in developed Europe are urging investors to unload 18.2 per cent of the companies they cover, up 5 percentage points from the start of the year, according to Thomson Reuters StarMine, a data company.

At the buy end of the spectrum, Japanese analysts have made the sharpest reductions, cutting their share of recommended stocks by almost 10 percentage points to 43.9 per cent.

By contrast, negative ratings in the US have risen 1.4 percentage points since December, with analysts rating 6.7 per cent of their stocks a sell and 48.6 per cent buys.

Still, the figures were “at historic levels” by US standards and reflected not only pessimism about the US economy but also several years of effort by the bulge bracket investment banks to increase the share of sells, said William Herkelrath, StarMine’s US sell-side specialist.

Analysts in the UK and Ireland have been faster to cut ratings than those in the US but slower than their counterparts in Germany, France and Spain. UK and Irish analysts advocate selling 14.2 per cent of the companies they cover, up from 10 per cent in December.

Globally, the percentage of negative ratings has risen from 9 to 12 per cent since the end of December.

“There is undoubtedly a trend here. Analysts are traditionally notoriously slow about adjusting downward when trends are negative. You are seeing late catch-up,” said David Knox, head of research at Cazenove.

Analysts in the rest of Asia and in Latin America remain optimistic, rating 59 per cent of companies a buy. The number of buy calls has dropped in Asia in the past month, almost all of the changes have come from analysts at global investment banks rather than at local stockbrokers.

Greg Tarver, StarMine’s Asia sell-side specialist, said that most local Asian brokers still believe “this cannot be as bad as 1997”.

The regional differences partially reflect the larger relative size of the local brokerage markets in the US and Asia outside of Japan. Local brokers who cover small companies tend to be boosters, opting for a buy or no coverage at all. Global banks that cover larger companies sometimes require analysts to have a fixed percentage of sell ratings.

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