Investors hunt for bargains amid global market turmoil
Investors have piled into flagging equities in the past week as they hunt for bargains amid the market turmoil sparked by Russia’s invasion of Ukraine.
Retail investors doubled down on buying the dip in US stocks with a total $7.1bn of US securities snapped up last week.
The soaring numbers follow a week in which retail investors bought up record numbers of US stocks, recording $9.1bn in the week after the Russian invasion of Ukraine, according to research from investment research firm Vanda.
Analysts at Vanda said the continuation shows that investors are holding fast in bets that the market will come roaring back.
“In the past five days, retail purchased in total $ 7.1 bn worth of US securities,” said Marco Iachini, senior vice president at Vanda.
“While we noticed some changes in their behaviour, the average investor appears quite sanguine about recession odds and the prospects of a bearish equity market.”
Vanda predicted said that retail investors could to “stubbornly” buy equities on the belief that this is yet another short-term retracement, but sharp losses could lead to a retreat.
“The average retail portfolio crossed into negative territory on Monday, and additional losses could increase their risk-aversion going forward,” Iachini said.
US energy stocks have seen an uptick in interest from retail investors in the past week as the US pledged to clampdown on Russian oil imports.
Energy stocks registered an all-time high on Monday at $340m and took up a heftier chunk of the total retail basket, while inflows into tech stocks slumped to their lowest point of the last two years.
UK investors followed a similar trend today as they shunned in-favour mining firms to back stocks that have plunged in the recent turbulence.
“After a strong run for commodity producers on the market, names like Rio Tinto and Glencore slipped back on the FTSE 100, with investors instead fishing for bargains among more beaten-up consumer-facing stocks including International Consolidated Airlines and Primark Associated British Foods,” said Russ Mould, Investment Director at AJ Bell.
British-Airways owner IAG has surged over nine per cent today, while Primark-owner Associated British Foods has risen over 6.5 per cent.