Global investors extend buying streak into equity funds on signs of easing inflation

July 7 (Reuters) – Global investors extended their streak as net buyers of equity funds into a second week, drawing support from indications of cooling inflation that may moderate central banks’ inclination to raise rates further.

According to Refinitiv Lipper data, global equity funds received a net USD 5.94 billion in inflows in the week ended July 5, after witnessing net buying of USD 3.36 billion in the previous week.

Last week’s personal consumption expenditures (PCE) report from the US Commerce Department showed cooler-than-expected inflation in May, while consumer spending abruptly decelerated, providing further evidence that the Fed’s barrage of rate hikes is having their desired effect.

Investors allocated USD 4.44 billion to US equity funds and USD 2.29 billion to Asian equity funds, while withdrawing USD 1.29 billion from European funds.

Among sector funds, inflows of USD 871 million were observed in industrials, USD 278 million in consumer staples, and USD 275 million in technology. However, financials experienced an outflow of USD 548 million.

Meanwhile, global bond funds received a net USD 10.4 billion in a second straight week of net buying.

Global government bond funds attracted inflows of USD 1.82 billion, while corporate bond funds recorded the largest weekly inflow in six weeks with USD 2.19 billion. Additionally, high-yield funds saw net purchases of USD 536 million, rebounding after two consecutive weeks of outflows.

Investors also pumped USD 53.1 billion into money market funds, marking their first weekly net buying in four weeks.

Data for commodity funds showed that investors withdrew USD 767 million from precious metal funds in a sixth straight week of net selling, but energy funds received about USD 35 million after two weekly outflows in a row.

Meanwhile, data for 24,130 emerging market funds showed equity funds had USD 504 million worth of outflow during the week, the first in four weeks, but bond funds received about USD 1.4 billion in inflows.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Maju Samuel)