Unexpected Recovery in Equity Funds Despite Global Index Declines

In a notable paradox amid the current turbulence across global financial markets global equity funds have witnessed their strongest inflows in over a month even as major stock indices continue to slide under the weight of high valuations and persistent interest rate pressures.

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Over $22 Billion in Weekly Inflows

According to a recent Reuters report based on data from EPFR Global global equity funds attracted net inflows of $22.4 billion during the week ending the highest level since early October.
These inflows followed several weeks of heavy outflows as investors reallocated part of their portfolios toward large-cap equities with solid fundamentals particularly in the technology energy and banking sectors.

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U.S. Markets Lead the Trend

Data showed that the United States was the main destination for fresh capital capturing the lion’s share of the inflows thanks to better-than-expected earnings from tech giants such as Apple and Microsoft alongside a temporary improvement in consumer-spending indicators.

Meanwhile, European markets experienced more moderate inflows whereas Asian emerging markets saw capital outflows amid weak Chinese demand and slowing industrial activity across the region.

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A Cautious Optimism Among Investors

Despite the return of liquidity to equity markets analysts emphasize that the current trend reflects cautious optimism rather than the beginning of a new bullish cycle.

Persistent macroeconomic headwinds — including global economic slowdown ongoing monetary tightening and rising geopolitical tensions — continue to limit risk appetite.

Some market strategists noted that investors appear to be “bottom-fishing” in equities without firm conviction that a lasting reversal is underway.

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Outlook for the Coming Weeks

The next few weeks are expected to bring high volatility in capital flows as markets await further signals from the U.S. Federal Reserve regarding the future path of interest rates.

Stabilizing energy prices and improving inflation data in major economies could support a gradual return of confidence in risk assets.

Analysts view the current phase as more of an investment repositioning period rather than the start of a sustained bull market. However if liquidity continues to flow into equities at this pace and macro risks ease the stage could be set for renewed momentum heading into the first quarter of 2026.

🔗 Source : https://www.reuters.com/world/china/global-markets-flows-graphic-2025-11-07/

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