LONDON (Reuters) – Investors have added to their global fairness holdings for the primary time in 2-1/2 months and continued to pile into bonds, Bank of America Merrill Lynch stated on Friday, as worries concerning the U.S.-China commerce spat despatched shudders by way of monetary markets.
The net influx into equities totaled $900 million in the week to Wednesday, the primary in 10 weeks, the financial institution stated, citing EPFR knowledge. That is eclipsed by the $135 billion that has left shares yr up to now.
Some $three.9 billion left rising market equities, the most important since June final yr.
Global equities, which rallied 15% till U.S. President Donald Trump upped the ante in early May, have retreated as tit-for-tat tariffs kicked-in and fading hopes of a commerce cope with China in the near-term stored buyers away from dangerous belongings.
Washington’s Huawei ban added to commerce tensions between the world’s two largest economies and triggered worries a few extended standoff over know-how.
“U.S.-China tech cold war to run for years, political shift to protectionism and redistribution well underway in West,” BAML stated.
Global bonds noticed inflows of $6.four billion, including to the $158 billion that’s already gone into safe-haven debt this yr.
Despite rising worries over a commerce warfare, BAML stated it nonetheless expects new highs in danger belongings this summer time and can’t see “Trump escalating China trade war from here”.
Reporting by Thyagaraju Adinarayan; Editing by Catherine Evans