Global equity funds extend inflow streak as earnings optimism and reduced rate-hike bets lift sentiment

Aug 14 (Reuters) - Global equity funds attracted inflows for a 12th consecutive week through August 12, buoyed by optimism over a strong earnings season and data showing weaker-than-expected U.S. payroll growth and easing inflation, which tempered expectations of a Federal Reserve rate hike.

Investors bought a net $18.62 billion in global equity funds during the week, slightly more than the previous week's $17.27 billion in net purchases, LSEG Lipper data showed.

The MSCI All-Country World Equity Index, which hit a record high of 1,163.05 on Wednesday, rose 2.85% last week—its best weekly performance since April 17—bolstered by strong earnings from AI-related companies such as Caterpillar and Palantir.

A U.S. Labor Department report on Thursday showed that producer prices were unchanged in July, reinforcing expectations that the Federal Reserve could leave interest rates unchanged next month.

By region, European equity funds attracted $13.52 billion, their largest weekly net inflow since July 8. U.S. and Asian equity funds also recorded inflows of $2.58 billion and $4.13 billion, respectively.

Investors, meanwhile, withdrew about $1.7 billion from technology-sector funds, ending a six-week run of net purchases. They, however, bought $1.6 billion in gold and precious metals equity funds and $609 million in consumer staples sector funds.

Weekly net investment in bond funds jumped to a four-week high of $18.01 billion during the week.

Short-term bond funds, euro-denominated bond funds, government bond funds and loan participation funds saw significant buying interest, attracting inflows of $4.45 billion, $2.57 billion, $2.24 billion and $1.06 billion, respectively.

Money market funds also attracted net investments of $28.41 billion, extending their inflow streak to a second consecutive week.

Among commodity funds, investors bought a net $2.62 billion in gold and other precious metals funds, remaining net buyers for a fifth straight week. Energy funds, meanwhile, recorded their first weekly inflow in three weeks, at $434 million.

Data covering 28,966 emerging-market funds showed that equity funds attracted net inflows of $3.45 billion for a fifth straight week, while bond funds received net investments of $871 million.

(Reporting by Gaurav Dogra)