The war in Ukraine sparked the largest outflow from European stocks on record with investors pulling out over $13 billion, Bank of America says

• Investors have pulled a weekly record of $13.5 billion from European equities, said Bank of America on Friday.
• The bank said gold fund inflows were at their highest since July 2020.

Russia's war against Ukraine has prompted investors to ditch European equities at their fastest pace ever, pulling out a weekly record of $13.5 billion, Bank of America said Friday.

The report also said investors sought perceived safety in gold and piled into the materials sector which includes the metals and mining group.

The $13.5 billion pulled from European equity funds in the week ended March 9 was more than double the previous week's record-setting outflows, funds tracker EPFR said in a separate note Friday. Bank of America uses EPFR data in compiling information for its Flow Show report.

"Russia's assault of Ukraine, and the increasingly indiscriminate approach taken by Russia to sustain that assault, forced European-focused investors to weigh a range of possibilities ranging from recession in key markets to a broadening of the current conflict," wrote Cameron Brandt, director of research at EPFR.

On the country level, Italy's dependence on imported energy and Russia's historic value as an export market led to Italian equity funds posting their biggest outflow in more than three years, said EPFR.

Meanwhile, Bank of America said weekly inflows of $2.4 billion to gold funds were the largest since July 2020. Gold is seen by some investors as a relatively safe investment, particularly at times of distress in other financial markets and as a hedge against inflation.

Inflation concerns were running through global equity markets as prices for oil and metals such as palladium and aluminum soared on concerns about supply shortfalls from Russia, a major producer of natural resources. The materials sector drew in $5.6 billion on a weekly basis, the largest ever inflow into that group, said Bank of America.

Russia's invasion of the former Soviet republic was heading into a third straight week and Friday carried a range of developments. Russian President Vladimir Putin reportedly said there's been some progress in cease-fire talks with Ukraine. Meanwhile, Ukrainian President Volodymyr Zelenskyy slammed European Union leaders for not fast-tracking his country's application to join the bloc.

One index tracking European stocks is the Stoxx 600 Europe. It's lost nearly 12% so far this year but managed to head for a weekly gain of more than 3%.