LONDON (Reuters) – The trillions wiped off global markets in recent weeks has triggered a contrarian ‘buy’ signal from BofA’s closely-followed ‘Bull & Bear’ sentiment indicator, while emerging markets are seeing their toughest time since the peak of the COVID crash.

The fear that high inflation and rapid-rising rates would lead to major economies going into recession has sent the global market spiralling downward. Global equities have lost close to 18% in the first quarter of this year. It’s the worst year start in history.

BofA’s analysts said their ‘Bull & Bear’ indicator had now moved into “unambiguous contrarian buy territory”, given the huge redemptions in developed market stocks, riskier high-yield debt and emerging market bonds.

BofA observed that the week featured the highest outflows from emerging market debt in March 2020 as well as the largest withdrawals form high yield bonds for 14 weeks (at $6.1 billion and $4.3 trillion, respectively) BofA cited EPFR data.

Europe suffered the fourteenth week’s withdrawals across the equity space. This region is the hardest hit by Russia-Ukraine.

In total, $5.2 Billion was out of world equity funds. $12.3 Billion left global bond funds for the seventh week.