As market volatility persists, private investors continue to sell down their equity holdings.

Capita Registrars’ latest bi-monthly survey, which tracks more than 1.6 million investors, found they sold £1 billion worth of shares during June and July. There was some buying, £400 million to be precise, but the net £500 million decline in holdings continues a trend that began in October 2006.

John Roundhill, director of Capita Registrars, says: ‘It is difficult to envisage private investors becoming more positive. They are deterred by fears of losses while markets remain volatile while falls in disposable incomes leave savings at the bottom of the agenda, those who do save will prefer cash for now.’

The June/July figures also show a continued rotation into defensive stocks, such as utilities and telecoms, and out of cyclical sectors, with industrials one of the hardest-hit segments.