Oct 18 (Reuters) - U.S. investors made large investments in equity funds in the week to Oct. 16, buoyed by strong third-quarter earnings from U.S. lenders and optimism over a potential Federal Reserve rate cut in November and signs of cooling inflation.
According to LSEG data, U.S. equity funds drew a sharp $20.08 billion in net purchases during the week, following about $3.98 billion worth of inflows in the previous week.
Strong earnings reports from mega-cap banks including Morgan Stanley (MS.N), opens new tab, JP Morgan Chase (JPM.N), opens new tab and Goldman Sachs (GS.N), opens new tab boosted investor sentiment, driving Wall Street's major indexes to records this week.
The financial sector gained a substantial $1.17 billion worth of inflows, the highest in three months. Technology and industrial sector funds saw a net $473 million and $378 million worth of purchases.
By segment, investors racked up a net $15.25 billion of large-cap funds, a sharp rebound from $4.25 billion in net sales during the previous week. Mid-cap, multi-cap, and small-cap funds witnessed $1.49 billion, $617 million and $473 million worth of inflows.
U.S. bond funds received $9.78 billion, the biggest weekly inflow in three months.
Investors scooped up U.S. general domestic taxable, short-to-intermediate investment-grade, and municipal debt funds worth a remarkable $2.12 billion, $2.04 billion and $1.72 billion, respectively.
Money market funds suffered $11.79 billion worth of net sales, the first weekly outflow in four weeks.
Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Nick Zieminski
