Global equity funds witnessed a surge in investments in the week through January 29, driven by a record rally in European shares, softened US tariff expectations on China, and prospects of further rate cuts by major central banks, reports Reuters.
Investors pumped a robust $15.2 billion into global equity funds during the week, which was their largest weekly net purchase since Dec. 25, 2024, as per LSEG Lipper data.
Investor appetite was boosted by a sharp rally in European shares, which remained strong despite a sell-off in major US AI-linked stocks triggered by concerns over DeepSeek, a low-cost Chinese artificial intelligence model.
The STOXX 600 index in Europe reached a new record of 540.49 on Friday, marking its sixth consecutive week of gains-the longest streak since March 2024.
The European Central Bank lowered interest rates by 25 basis points on Thursday, fueling optimism that US rates might also be reduced further this year following President Donald Trump's comments at the World Economic Forum about his desire to lower global oil prices, interest rates, and taxes.
Meanwhile, the Federal Reserve kept rates steady this week.
European equity funds gained $5.66 billion in net purchases and lead regional inflows. Investors, meanwhile, added US and Asian funds of $5.58 billion and $3.03 billion, respectively.
At the same time, global bond funds witnessed the fifth weekly inflow in a row, to the tune of $21.14 billion.
Government bond funds received $3.25 billion, the highest weekly inflow since Oct. 16, 2024.
