Global equity funds draw weekly inflows on trade deal optimism

(Reuters) -Inflows into global equity funds picked up again in the week through July 23 as optimism over U.S. trade deals, stronger than expected U.S. economic reports and an encouraging start to the corporate earnings season boosted risk sentiment.

Global investors snapped up a net $8.71 billion worth of equity funds during the week, reversing a $4.4 billion net withdrawal in the prior week, data from LSEG Lipper showed.

The United States and Japan agreed a deal earlier this week which cut existing import tariffs on Japanese goods to a lower-than-threatened 15%. Investors were also hopeful about the prospects of the U.S. and the European Union settling on U.S. import tariffs of around 15%.

Investors took comfort from encouraging initial earnings reports as advanced AI chip maker TSMC posted a record profit and Gatorade owner PepsiCo upgraded its earnings forecasts.

Net European equity fund inflows reached an 11-week high of $8.79 billion, while Asian funds drew a net $1.17 billion. U.S. equity funds lagged, although net outflows eased to $2.68 billion from about $11.67 billion the prior week.

The technology sector gained $1.61 billion, reversing the previous week's $576 million net outflow. The financial and industrial sectors also saw $1.13 billion and $1.61 billion net additions, respectively.

Net purchases of global bond funds extended into a 14th week as they added $17.94 billion.

Investors pumped $4.14 billion into short-term bond funds, the largest amount in 13 weeks. Euro-denominated bond funds and high-yield funds attracted a net $3.89 billion and $2.51 billion, respectively.

Gold and precious metals commodity funds recorded a net $1.9 billion worth of purchases, the largest weekly figure since June 18.

Global money market funds drew a net $2.09 billion after about $21.78 billion of net sales a week ago.

Emerging markets saw a revival in buying interest with investors adding bond funds of $2.19 billion and equity funds of $250 million after net disposals of $1.14 billion and $155 million in the prior week, data for a combined 29,669 funds showed.

(Reporting by Gaurav Dogra in Bengaluru; Editing by Kirsten Donovan)