Investors dumped U.S. shares, bought China in week to Wednesday – BofA

Feb 9, 2024

LONDON (Reuters) – Investors dumped U.S. and real estate shares and bought Chinese stocks in the week to Wednesday, a report from Bank of America citing data from EPFR said on Friday, saying the China flows were likely driven by Chinese public funds.

U.S. equities saw outflows of $15.6 billion, the most since September 2023, compared to a record $18.8 billion of inflows to China, BofA said in its weekly roundup of fund flows in and out of world markets.

Beleaguered Chinese stocks rose this week ahead of the Lunar New Year break, moving off five-year lows on a slew of signals that authorities are strengthening their resolve to support slumping markets. [.SS]

State fund Central Huijin Investment said on Tuesday it has expanded the scope of funds it is buying and will further increase purchasing, seen as a broad – if short-term – support.

Meanwhile, the U.S. S&P 500 has continued to set new records this week, even as the investors tracked in the fund flow report pulled their cash. [.N]

One market segment on which investors particularly soured was real estate funds, which saw outflows of $1.1 billion in the week – the most since May 2022 – and which BofA attributed to U.S. regional bank woes.

A sell-off in regional U.S. bank stocks triggered by New York Community Bancorp last week has brought the sector’s exposure to troubled commercial real estate into focus.

Elsewhere the report showed money market funds continued to lap up investors’ money, with the cash equivalents seeing inflows of $40.1 billion, taking assets over $6 trillion.

“Ain’t no peak in cash levels yet,” BofA said.

(Reporting by Alun John, editing by Lucy Raitano and Hugh Lawson)

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