HFs exit Tech as China shares post biggest weekly net buying on record: GS By Investing.com

Investing.com – Hedge funds (HF) are pivoting from sectors such as information technology, energy and financials into consumer discretionary, materials and consumer products, Goldman Sachs revealed in a new report.

Energy, in particular, faced sustained selling pressure. Hedge funds have now net sold US Energy for five consecutive weeks, driven entirely by short selling.

“This week’s short selling in the sector was the biggest in 5 years,” as short selling outnumbered long selling by a staggering 6.4 to 1 margin.

As a result, Energy’s share of US global net exposure fell to 2.3%, down from a year-to-date high of 3.3% in mid-August.

Meanwhile, the most significant regional development was in Asia, where both developed (DM) and emerging (EM) markets posted their biggest net purchases in over a decade, led by China and Hong Kong.

“Asia (both DM and EM combined) was the region with the most net acquisitions in our Prime book this week and posted the largest net acquisition in 10 years,” notes Goldman. “Net buying this week was driven by long buying and, to a much lesser extent, short covering.”

Single stocks and macro products accounted for most of the activity, with Chinese stocks posting the biggest weekly net purchases on Goldman Sachs’ books. Hong Kong also saw substantial buying, although it focused more on macro products than individual stocks.

The strong interest in Asian shares comes after China recently unveiled a set of measures aimed at combating the broader economic slowdown.

Chinese stocks continued their upward trajectory on Monday, with mainland stocks on track for their best monthly performance in nearly a decade.

Specifically, the continental benchmarks started the week on a positive note after their best weekly performance in nearly 16 years. The blue-chip index gained more than 6.22%. Meanwhile, it rose 5.7% and Hong Kong’s climbed 3.34%.