Hedge funds made adjustments to their positions last week, reducing bullish bets on major tech stocks and increasing short positions, according to Morgan Stanley’s quant strategists.

The selling observed in mega-cap technology stocks on Thursday marked the third-highest level since May 2022.

“Flows to the broader TMT universe also skewed towards being net sold as has been the case since August, though the magnitude was not as notable [last] week,” the analysts said.

Overall, flows in the broader tech sector continued to show a tendency toward net selling, a trend observed since August, though the magnitude was less notable last week.

Moreover, hedge funds engaged in net selling of global equities, with discretionary stocks in the U.S. experiencing the strongest pace of selling since early January.

The financials sector was the second-most net sold, while net buying in real estate reached its highest level since February 2022. Hedge funds contributed to the buying trend through long additions, while also covering shorts in the sector.

Additionally, ETFs saw small amounts of buying in North America.