HSBC strategists say European investors are moving money out of France and into the UK, with global equity funds entering the fourth quarter posting their strongest year-to-date inflows since 2021.

The team led by Amit Shrivastava said European fund flows have remained resilient, with investors reallocating from France to the UK, and regional funds raised their allocation to the UK by nearly 45 basis points last month.

HSBC cut its outlook for the French market, citing weaker economic forecasts and a deteriorating fiscal environment.

Technology and healthcare remain among the least-held sectors in Europe, although funds have already begun rebuilding positions.

Global equity fund inflows in 2026 reached 4.4% of their assets under management, and historically the fourth quarter has tended to be the strongest period for both fund inflows and stock market returns.

HSBC's institutional investor equity preference indicator rose to a two-month high, driven in part by increased holdings in economically sensitive stocks and a pullback in money market fund inflows.