Latest News

Ukraine war sees European equities suffer record outflows – BOFA

© Reuters. FILE PHOTO: A Bank of America logo is pictured in New York City, New York, U.S., January 30, 2019. REUTERS/Carlo Allegri

LONDON (Reuters) -European equities as well as financial stocks funds suffered their biggest outflows on record as investors piled into cash in the week to Wednesday as the war in Ukraine roiled global markets, BofA said in its weekly flow note on Friday.

Investment banks, including BNP Paribas (PA:BNPP), have slashed their targeted returns for European equities while financial stocks have bled heavily as investors have been forced to unwind bets of large interest rate increases this year due to the war.

European equity funds haemorrhaged $6.7 billion while financial funds saw outflows of $3.5 billion, said BofA in its report based on EPFR data.

Meanwhile cash funds enjoyed the largest inflow in 9 weeks at $46.3 billion and $1.9 billion was funnelled to gold.

“Russia/Ukraine means bigger ‘Inflation shock’, smaller ‘Rates shock’, bigger ‘Recession shock’,” Michael Hartnett, chief investment strategist at BofA, said in a note to clients.

“Fed/ECB hopelessly trapped between deflation on Wall St & inflation on Main St (Euro producer prices up staggering 30.6% YoY pre-invasion); oil price spike, military-sanctions escalation cycle, financial market accidents threaten global recession,” he said, referring to the U.S. and euro zone central banks.

The conflict has provided impetus to commodity prices, with BoFA strategists noting that a commodity index has posted its strongest annual start since 1915.

Market breadth has worsened across the board, with 42% of global equity indices trading below the 50-day and 200-day moing averages in U.S. dollar terms.

Ukraine war sees European equities suffer record outflows – BOFA

Disclaimer:Fusion Mediawould like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Latest News