LONDON, Sept 16 (Reuters) - Banks, insurance and trading

firms returned to favour as hedge funds last week snapped up

these company stocks at the fastest pace since June 2023, a

Goldman Sachs ( GS ) note showed.

After holding a net sold position in seven of the last eight

weeks, financial sector stocks were the most sought after on

Goldman Sachs' ( GS ) prime brokerage trading desk, which lends to

hedge funds and tracks their trades, the note released on Friday

and seen by Reuters on Monday showed.

These bets comprised almost entirely long positions, it

said.

A short position bets that an asset price will decline in

value, and a long position expects it to rise.

Europe's STOXX 600 banking index rose by about 1.9%

during the week to last Friday, while the Dow Jones banking

index closed down 1.6% for the week.

The hedge fund buying was concentrated in North America and

Europe, the note said.

Hedge funds took long positions in banks, insurance and

capital markets companies that facilitate trades.

On the flip side, they moderately sold consumer finance

companies and mortgage trust firms, Goldman said.

Overall, hedge funds finished the week with more sell

positions in stock markets, the note added.

They sold global equities for the ninth straight week and at

the quickest pace in five months, it said.

Stockpicking hedge funds posted a 0.42% weekly performance

gain driven in part by the general rise in equity markets, the

bank said.

The S&P 500 index rose just over 4% last week, while

the broadest European stock index rose 1.85%.

Systematic stock traders saw a negative -0.18% for the week

to Sept. 13, the note said.