Big Wall St. investors chased tech during GameStop retail frenzy - BofA
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FILE PHOTO: A Wall Street sign outside the New York Stock Exchange in New York City, New York, U.S., October 2, 2020. REUTERS/Carlo Allegri/File Photo/File Photo
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LONDON (Reuters) - Deep-pocketed investors pumped a record $4.2 billion into big technology stocks last week, BofA's flow data showed on Friday, taking advantage of the slight pullback on Wall Street while retail traders were busy buying stocks such as GameStop.
An army of retail investors went toe-to-toe with Wall Street professionals last month by buying into stocks that were heavily shorted by hedge funds. In the tussle, some funds had to sell out of their long positions to cover the losses, causing wider falls in stock prices.
"Big client zeitgeist in past two weeks has unambiguously been to buy the FAANMG (Facebook, Amazon, Apple, Netflix, Microsoft and Google-owner Alphabet) underperformance," said Michael Hartnett, BofA's chief investment strategist.
Big Tech has been one of the biggest winners of the pandemic, with revenues turbocharged by stay-at-home rules and increased interest from investors who are taking advantage of the cheap money available.
Meanwhile, a sudden jump in equity volatility last week also sent investors running for safety with bonds attracting $21.2 billion, the largest in four months. Those fears, however, receded this week with Wall Street's main indexes hitting record highs.
Away from the Wall Street noise, emerging markets stocks have been the top pick among investors as they poured in $5.7 billion in the week to Wednesday, marking inflows in 19 of the past 20 weeks.
The retail trading fever also sent silver surging past $30 an ounce for the first time since 2013 before prices fell back. The precious metal attracted a record $2.8 billion in the week to Wednesday, BofA said.
(Reporting by Thyagaraju Adinarayan; Editing by Tommy Wilkes and Susan Fenton)
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