By Nell Mackenzie
LONDON (Reuters) – Global hedge funds last week sold tech stocks for a third week running as managers chased falls in the S&P 500 index and cut exposure to big tech stocks, a Goldman Sachs note said.
U.S. tech stocks were the most net sold sector in the week to Jan. 6 with hedge funds shedding these stocks at the highest level in 11 weeks, the Goldman note to clients on Friday said.
Hedge funds not only cut long positions but piled into short bets that the prices on these equities would fall, the note added.
Apart from communications devices, all kinds of tech shares were sold, said the bank, including software companies, semi conductors, tech hardware and storage companies related to the technology industry.
European tech stocks fell 4.24% last week, their biggest weekly drop since July, while the tech-heavy Nasdaq stock index tumbled just over 3% and the S&P kicked off 2024 with its worst weekly showing in months.
Goldman’s prime brokerage department, which serves hedge funds, saw stockpickers’ performances fall 1.07% in the week between Dec. 29 and Jan. 4, the note said.
Elsewhere, hedge funds also ditched consumer discretionary companies making products that shoppers typically like to buy but don’t necessarily need, Goldman added.
Speculators fled these positions at the fastest pace since September 2023, Goldman said, adding that traders were net sold globally in hotels and restaurants, retail stores, and auto companies.
Hedge funds that were already short in the consumer discretionary sector saw a 3.5% bump in performance, said the bank.
(Reporting by Nell Mackenzie; Editing by Sharon Singleton)
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