LONDON (Reuters) – European equities as well as financial stocks funds suffered their biggest outflows on record while 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.
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.
(Reporting by Karin Strohecker; editing by Dhara Ranasinghe)
