Massachusetts : Investors cut their holdings of European equity funds by more than $2 billion (Dh7.35 billion) in the week to May 5, the biggest outflows in almost a year, amid concern Greece's debt crisis would spread, according to EPFR Global.
"The damage Greece's fiscal problems might do to bank balance sheets, Europe's growth prospects and the ability of riskier sovereign borrowers to tap credit markets kept investors on edge going in May," the Cambridge, Massachusetts-based research company said in an e-mailed release.
The European Stoxx 600 plunged 1.5 per cent to 246.90 yesterday, capping three days of declines that have seen 340 billion euros (Dh1.6 trillion) wiped off the value of its companies. The gauge has retreated 9.3 per cent from this year's high on April 15 amid speculation that a 110 billion-euro rescue package for Greece will need to be extended to Spain and Portugal.
Commodity funds received record inflows of $1.4 billion, EPFR said. China equity funds saw "modest" outflows as the government cracked down on property speculation, while redemptions reached a 45-week high for Latin American equity funds, EPFR said.
US stocks tumbled the most in a year on Thursday on concern Europe's debt crisis will halt the global recovery. The selloff briefly erased more than $1 trillion in market value.
Banks shine amid turbulence
HSBC Holdings, Europe's biggest bank, said first-quarter earnings beat the same period in 2009 as the US unit posted its first profit in three years.
Underlying pretax profit will be "comfortably ahead" of the first quarter of 2009, HSBC said in a statement. Reported pretax profit will drop due to an exceptional movement on the fair value of the bank's debt.
Royal Bank of Scotland has reported a narrower loss in the first quarter as the global economic recovery led to a reduction in impairments on bad loans. RBS reported yesterday a net loss of £248 million (Dh1.38 billion) for the first three months of the year, compared to £902 million a year earlier. Impairments for bad loans fell from £2.86 billion to £2.68 billion.
