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Updated March 8th, 2024 at 17:23 IST

Investors flock to global equities amid rate cut hopes: Report

Uptick was fuelled by concerns over weak US manufacturing data and indications from Federal policymakers hinting at potential rate cuts later in the year.

Reported by: Business Desk
Nifty 50 hits fifth all-time high in 2024, amid fiscal boost
Asian funds remained popular, attracting approximately $2.89 billion in net purchases | Image:Freepik
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Global equity funds have seen a surge in investor interest, drawing in $6.5 billion in seven days leading up to March 6. The uptick was fuelled by concerns over weak US manufacturing data and indications from Federal Reserve policymakers hinting at potential interest rate cuts later in the year.

Following a pattern from the previous week, this marks the second consecutive week of inflows into global equity funds, according to data from LSEG.

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US central bankers have hinted that despite recent upticks in price pressures, progress on broader inflation could open the door for interest rate reductions later in the year. The sentiment has been reflected in the record high touched by MSCI World Stock Index, hitting 774.66 on Friday, buoyed by remarks from Fed Chair Jerome Powell reinforcing expectations of forthcoming rate cuts.

Regionally, Asian funds remained popular, attracting approximately $2.89 billion in net purchases for the eighth consecutive week. European and US funds also saw positive inflows, amounting to around $1.9 billion and $1.2 billion, respectively.

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The technology sector retained investor interest, witnessing $1.45 billion in fund inflows for its eighth consecutive week of net purchases. In contrast, the financial sector experienced net withdrawals of $834 million.

Turning to the bond market, global bond funds also saw inflows, accumulating $18.04 billion in flows, marking the highest weekly amount since mid-April 2021. Medium-term US dollar bond funds were particularly favored, attracting approximately $3.7 billion, the largest net inflow since May 3, 2023. Corporate and government bond funds also saw healthy inflows of $3.06 billion and $2.23 billion, respectively.

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Additionally, money market funds witnessed substantial activity, with net buying totaling $57.3 billion, marking the largest weekly net purchase in eight weeks.

However, not all sectors experienced positive trends. Precious metal funds saw outflows for the tenth consecutive week, totaling about $788 million on a net basis. Energy funds also experienced net disposals of $121 million.

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In emerging markets, investors remained net sellers of debt funds for the seventh successive week. Furthermore, they offloaded approximately $1.73 billion worth of equity funds, the largest withdrawal since Jan. 24, according to data covering 29,724 funds.

(With Reuters inputs)
 

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Published March 8th, 2024 at 17:23 IST

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