February 28, 2020 / 9:05 AM / a month ago

Investors flee stocks for bonds on rising recession fears: BofA

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., February 26, 2020. REUTERS/Lucas Jackson

LONDON (Reuters) - A whopping $20 billion has left global equity funds, BofA said on Friday, as investors fled risky assets on concerns the fast-spreading coronavirus could trigger a global recession.

A sudden jump in coronavirus cases outside China this week raised pandemic fears that led to panic-selling across global stock markets.

Global equities, which have lost nearly $6 trillion in value this week alone, were on track for their worst weekly loss since 2008.

(Graphic - Value loss this week: here)

Investors scrambled into bond funds, mainly investment grade, and they attracted $12.9 billion, BofA’s numbers for the week to Wednesday showed.

Junk bonds meanwhile saw the third biggest outflows ever of $6.9 billion as BofA saw the chances of credit defaults “surging”.

The bank said the risk of a global recession was rising and on Thursday cut its annual global growth forecast to the lowest since the 2008 financial crisis.

Reporting by Thyagaraju Adinarayan; Editing by Tommy Reggiori Wilkes

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