NEW YORK, July 15 (Reuters) - Global hedge funds'

exposure to software stocks in the U.S. reached "new multi-year

lows" last week after a broader sell-off in the technology

sector, Morgan Stanley ( MS ) said in a note.

"Software was the most net-sold, which continues the streak

of net selling in the space since late-April and brings

exposures to new multi-year lows," the bank said.

A stock rally driven by a few tech stocks has raised

concerns among some investors that gains could evaporate if the

sentiment around them changes.

Morgan Stanley ( MS ), which tracks hedge funds' flows

through clients of its prime brokerage unit, said that overall

portfolio managers were net sellers of equities last week in the

U.S., Europe and Asia, ex-Japan.

Despite some volatility on Thursday, when data showed U.S.

consumer prices fell in June for the first time in four years,

hedge funds net-sold equities every day in the week ended on

June 11.

Last week, the S&P North American Technology Software Index

fell roughly 2%, but is still up 8.8% year to date.

It includes companies such as Adobe, Salesforce ( CRM )

, Microsoft ( MSFT ) and Oracle.

Outside the technology, media and telecommunications sector,

hedge funds also ditched cyclical stocks, which swing in

accordance with the economic cycle.