August 31, 2018 / 12:12 PM / a year ago

Investors pile into equities, stick with EM as risk appetite firms

LONDON, Aug 31 (Reuters) - Improved risk sentiment saw investors pour money into equities over the past week, while outflows from emerging markets abated despite some big swings in emerging market currencies, flows data showed on Friday.

There were $7.6 billion of flows into equities and $800 million into bonds, while $300 million left safe haven gold, according to a research note by Bank of America Merrill Lynch using data from flow tracker EPFR.

Emerging markets saw inflows worth $400 million into equities and $100 million into debt.

“No sign of EM equity and debt flow capitulation despite fresh sell-off in EM FX,” the bank said in the note. It was referring in particular to the Brazilian Real, which has weakened 12 percent against the dollar this month, and the Turkish Lira, down 34 percent this month.

The bank’s bull and bear indicator rose to 3.6 from 3.3 on what it called “end-of-summer bullish flows and price action”.

Investors in particular bought into the tech sector, which recorded $1.2 billion of inflows, and healthcare with $1.1 billion — its biggest inflows in 18 months, the bank said.

There were inflows of $300 million into investment-grade corporate bonds and $400 million into high-yield corporate debt, providing further evidence of a recovery in credit markets over the past few months, the bank said. (Reporting by Abhinav Ramnarayan; Editing by Saikat Chatterjee and Andrei Khalip)

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