Hedge funds are shorting fewer UK stocks than at any time since the financial crisis began, amid optimism that the worst of the downturn has passed and a surge in gobal equity markets.

Managers attributed the low level, revealed in analysis for Financial News by short selling research company dataexplorers, to the current euphoria in stock markets; tough constraints on hedge funds' activities in the wake of the crisis; and to managers' aversion to the disclosure required for large short positions.