HEDGE FLOW-Hedge funds sell stocks at the fastest pace in five months, says Goldman

By Nell Mackenzie

LONDON, May 13 (Reuters) - Hedge funds sold single stocks at the fastest pace in five months in the week to May 10, Goldman Sachs said in a client letter, ahead of U.S. inflation figures that could determine global central banks' next moves.

Sellers also outweighed buyers of global equities for the first time in four weeks, the Goldman Sachs prime brokerage note which tracks hedge fund activity showed.

This included traders that unwound long positions, which speculate that the price of an asset will rise, and those that added short positions, which bet on a fall in value, the bank said.

A reading of U.S. inflation this week could be the deciding factor for near-term market direction.

While some central banks in Europe have started to cut rates and the European Central Bank is widely expected to follow in June, U.S. borrowing costs may stay higher for longer.

Hedge funds focused their selling on Europe and developed markets in Asia, while North American and Asian emerging markets had more buyers than sellers, the note said.

Chinese equities were bought for the third straight week, it added.

Traders focused selling on so-called consumer discretionary companies, including luxury items and cars, which ended the week as the most net sold sector in Europe and North America, said Goldman Sachs.

Hedge funds ditched these long positions and added short bets at the fastest pace since September, the bank added.

Technology and financial equities were the next most sold sectors, said the bank, while hedge funds placed long bets on energy, real estate and utilities.

The number of U.S. real estate long positions outweighed bets against the sector by the most since June 2022, said the note. (Reporting by Nell Mackenzie; editing by Dhara Ranasinghe, Kirsten Donovan)