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LONDON (Reuters) – Investors have added to their global equity holdings for the first time in 2-1 / 2 months and continued to pile into bonds, Bank of America Merrill Lynch said on Friday, as worries about the US-China trade spat shudders through financial markets.
The net inflow into equities totaled $ 900 million in the week to Wednesday, the first in 10 weeks, the bank said, quoting EPFR data. That is eclipsed by the $ 135 billion that has left stocks year to date.
Some $ 3.9 billion left emerging market equities, the biggest since June last year.
Global equities, which rallied 15% until US President Donald Trump upped the ante in early May, have retreated as tit-for-tat tariffs kicked-in and fading hopes of a trade deal with China in the near-term investors investors from risky badets.
Washington's Huawei has added to trade tensions between the world's largest economies and triggered worries over a prolonged standoff over technology.
"U.S.-China tech warriors for political protection and redistribution in West," BAML said.
Global bonds saw inflows of $ 6.4 billion, adding to the $ 158 billion that's already gone into safe-haven debt this year.
Despite growing worries over a trade war, BAML said it still shows up high risks in this country and can not see "Trump escalating China trade war from here".
Reporting by Thyagaraju Adinarayan; Editing by Catherine Evans
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