Global investors pull back, cautious over tech valuations and US labour

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(Reuters) -Global equity fund inflows cooled significantly in the week to November 12 as worries about stretched technology valuations and signs of softening U.S. labour market conditions fuelled risk-off sentiment.

According to LSEG Lipper data, global investors bought just $4.11 billion worth of equity funds during the week, a sharp reduction from $22.27 billion worth of net purchases the prior week.

Concerns intensified after a private report suggested the U.S. economy shed jobs in October, although the official figures remain unavailable due to the weeks-long government shutdown.

A pullback in major technology stocks and SoftBank Group’s disclosure that it sold $5.83 billion worth of Nvidia shares also weighed on sentiment.

Asian equity funds received $3.04 billion, the fifth weekly inflow in a row, and led regional flows. U.S. funds also had a net $1.15 billion worth of purchases while European funds saw outflows of $1.87 billion.

The technology sector attracted $2.59 billion, still the smallest amount in four weeks. Investors also added healthcare and industrial sector funds of $915.2 million and $326 million, respectively.

Global bond funds drew inflows for the 30th week in a row, amounting to $13.11 billion on a net basis.

Short-term bond funds saw an uptick in demand as inflows surged to a seven-week high of $5.77 billion. Euro-denominated bond funds and corporate bond funds also received notable inflows of $2.31 billion and $1.9 billion, respectively.

Gold and precious metal commodity funds witnessed a renewal in demand following two successive weekly outflows as these funds gained $1.64 billion worth of inflows.

Emerging market funds’ data for 28,738 funds showed that equities received $2.17 billion, a third successive weekly inflow, while bond funds had a third consecutive outflow, worth $1.45 billion in the most recent week.

(Reporting by Gaurav Dogra; Editing by Andrew Heavens)