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Global equity funds draw fourth weekly inflow amid rate cut bets
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Global equity funds draw fourth weekly inflow amid rate cut bets
Jul 19, 2024 5:49 AM

(Reuters) - Global equity funds attracted inflows for a fourth successive week in the seven days to July 17, spurred by expectations of a Federal Reserve rate cut after recent data showed cooling inflation, fuelling a stock market rally.

According to LSEG data, investors acquired global equity funds worth a net $26.51 billion during the week, logging their biggest weekly net purchase since February 2022.

The MSCI's global stock index reached an all-time high of 832.35 last Friday following an inflation report that indicated a 0.1% decline in U.S. consumer prices for June, reinforcing market expectations of an impending Fed rate cut.

Global stocks have, however, dropped around 1.3% so far this week, driven by a sell-off in the technology sector amid escalating Sino-U.S. trade tensions.

By region, investors pumped in a massive $21.7 billion into U.S. equity funds, the largest amount since February 2021. European and Asian funds drew $2.2 billion and $2.03 billion worth of inflows.

The tech, industrial and financial sectors witnessed upbeat demand as they garnered $1.57 billion, $1.49 billion and $1.4 billion of inflows, respectively.

Global bond funds, meanwhile, remained popular for the 30th week in a row as they secured $15.84 billion in inflows during the week.

Corporate bond funds received a notable $3.38 billion, the seventh weekly inflow in a row. Government and loan participation funds also experienced net purchases, valued at net $2.16 billion and $1.45 billion, respectively.

Investors also bought about $3.18 billion of money market funds, extending weekly inflows into a third week.

In the commodities segment, precious metals funds had $1.06 billion of net purchases, the highest for a week since March 20. Energy funds saw about $51 million of inflows.

Data covering 29,555 emerging market funds showed that investors offloaded about $1 billion worth of equity funds, breaking a three-week buying trend. Bond funds, meanwhile, witnessed sixth weekly outflow in a row, amounting to $1.8 billion on a net basis.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Mrigank Dhaniwala)

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