U.S. equity funds attract first weekly inflow in three weeks

July 31 (Reuters) - U.S. equity ‌funds drew inflows ​in ​the week to July 29, snapping a two-week streak of outflows, as investors added exposure to mega-cap technology funds ‌during a recent selloff on bets that the market rally ⁠could continue.

Investors bought a net $11.83 billion in U.S. equity funds, more than reversing ‌the combined $10.68 billion in outflows ‌recorded over the previous two weeks, according to LSEG Lipper data.

After last week's results from Alphabet and Tesla, which showed negative cash ​flows and weighed on the technology sector, strong earnings from Microsoft and Amazon on Thursday eased concerns over heavy capital spending ⁠and lifted the S&P 500 1.66%.

"Microsoft indicated further acceleration in cloud revenue growth for the ​current quarter, while Alphabet reported an increase in advanced cloud orders that have yet to be recorded as revenue," ​said Mark Haefele, chief investment officer ‌at UBS Global Wealth Management.

"We remain constructive on the AI growth story."

Investors bought a net $11.57 billion in U.S. ⁠large-cap funds, marking their largest weekly net purchase since June 24. Mid-cap and small-cap funds, however, saw outflows of $2.29 billion and $196 million, respectively.

Technology-sector funds attracted $4.9 ⁠billion, their largest weekly inflow since July 8. Financials and consumer staples also recorded ​net purchases of $1.96 billion and $751 million, respectively.

Meanwhile, inflows into U.S. bond funds slowed to a 15-week low of $1.34 billion during the week.

Net purchases of short-to-intermediate government ‌and Treasury funds, as well as short-to-intermediate investment-grade funds, eased to $865 million and $1.08 billion, respectively, from $1.32 billion and $1.54 ‌billion in the previous week.

Investors withdrew $466 million from general domestic taxable fixed-income ⁠funds but bought a net $761 ‌million in municipal debt ​funds.

Money market funds recorded net outflows of $11 billion for a third consecutive week.

(Reporting by Gaurav Dogra; Editing by ‌Sharon Singleton)

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