Global equity funds record biggest weekly outflows in three months

(Reuters) - Outflows from global equity funds in the week ended Dec. 7 hit a three-month high on fears that interest rates could stay higher for longer than expected amid mounting worries about a recession next year.

According to Refinitiv Lipper data, investors offloaded a net $22.03 billion worth of global equity funds, marking their biggest weekly net selling since Sept. 7.

Graphic: Fund flows: Global equities bonds and money market, https://fingfx.thomsonreuters.com/gfx/mkt/xmpjkkgaqvr/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg Reports showing an upbeat U.S. services industry activity and higher-than-expected nonfarm payroll additions in November raised bets that the Federal Reserve will be more hawkish than expected.

Investors were also worried as the biggest U.S. banks including Goldman Sachs, J.P. Morgan and Bank of America warned of a recession as inflation threatens consumer demand.

Investors sold a net $26.65 billion in U.S. equity funds, although they purchased European and Asian equity funds worth $3.41 billion and $990 million, respectively.

Among equity sector funds, tech, financials and consumer discretionary witnessed outflows of $1.04 billion, $702 million and $523 million, respectively.

Graphic: Fund flows: Global equity sector funds, https://fingfx.thomsonreuters.com/gfx/mkt/zjpqjjqrovx/Fund%20flows-%20Global%20equity%20sector%20funds.jpg Meanwhile, global bond funds attracted $8.54 billion in inflows after witnessing outflows for four weeks.

Corporate bond funds received $2.17 billion, and government bond funds drew $1.06 billion, the biggest weekly inflow in three weeks, while outflows from short- and mid-term bond funds eased to a 16-week low of $272 million.

Graphic: Global bond fund flows in the week ended Dec 7, https://fingfx.thomsonreuters.com/gfx/mkt/mopakkmerpa/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Dec%207.jpg Meanwhile, money market funds accumulated $62 billion in net buying, marking the biggest weekly inflow since Nov. 2.

In the commodities space, energy funds received about $87 million in a seventh successive week of net buying. Still precious metal funds recorded outflows of $357 million, the most in four weeks.

According to data available for 24,734 emerging market (EM) funds, equity funds saw outflows of 1.06 billion after two straight weeks of inflows, but investors purchased $1.35 billion worth of bond funds. Graphic: Fund flows: EM equities and bonds, https://fingfx.thomsonreuters.com/gfx/mkt/gkplwwmnzvb/Fund%20flows-%20EM%20equities%20and%20bonds.jpg

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Vinay Dwivedi)