LONDON (Reuters) – Investors stormed out of equities and piled $126.4 billion into cash, according to BofA’s weekly flow data, as worsening economic forecasts due to the coronavirus accelerated a rush for safety.
Equity funds saw $7.3 billion in outflows for the week to Wednesday, the BofA data showed. Only healthcare and IT stocks were resilient to the virus shock, attracting a combined $4.9 billion.
However risk-averse investors continued to add money to junk-rated bond funds with $4.3 billion flowing in as the U.S. Federal Reserve’s pledge buy some speculative-grade debt helped sentiment.
BofA said the new consensus in markets was “buy what the Fed buys.”
Following the Fed, the European Central Bank said on Wednesday it would be willing to lend against some assets rated below investment-grade, raising hopes that the bank could eventually start outright purchases of weaker credits.
(Reporting by Thyagaraju Adinarayan; Editing by Tom Wilson)
