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As global markets swirled early this week, hedge funds stepped in to buy sharply lower technology stocks, according to data from brokerage Goldman Sachs Group Inc.
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The S&P 500 suffered its worst drop in nearly two years on Monday. Although it rebounded from its lowest level, partly due to better-than-expected economic data boosting investor confidence.
Data showed that the net buying volume of individual U.S. stocks on that day was the largest in about five months.
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Technology stocks were among the biggest losers on Monday, and hedge funds seized the opportunity to add to their holdings of information technology stocks for the biggest gain since June, Goldman Sachs said.
This bullish wave represents a change in trend as these investors have sold off large-cap tech stocks in recent months.
Wall Street
Photo: iStock
“Many hedge funds see massive sell-off as a buying opportunity”said Jonathan Caplis, CEO of hedge fund analytics firm PivotalPath.
“Most managers we spoke with viewed the current issues as short-term and perception-driven rather than long-term issues based on the fundamentals of public companies or even the U.S. economy as a whole.”.
The S&P 500 rose more than 1% on Tuesday after falling 3% the previous day, its worst day since September 2022.
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Concerns about economic growth Disappointing earnings from some of the biggest technology companies and expanded positioning led to a sell-off that dragged markets from Asia to Europe and the United States..
Even after Monday’s buying, hedge funds’ exposure to information technology stocks is the smallest in more than a decade, according to Goldman Sachs’ brokerage book.
Apart from, JPMorgan’s quantitative and derivatives strategists said institutions saw net buying of $14 billion during market trading on Monday..
Bloomberg
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