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Tuesday, February 21, 2012

Bullish hedge funds hike their bets in 2012 rally | Reuters

Bullish hedge funds hike their bets in 2012 rally | Reuters: Many funds think the European Central Bank's long-term refinancing operations (LTRO), which flooded markets with 489 billion euros ($644 billion) of cheap cash in December and provide more this month, are a turning point in propping up the region's battered banks.

They are also betting that China, which is facing a fifth successive quarter of slowing economic growth, will experience a so-called 'soft landing', while the U.S., which saw its fastest growth in one-and-a-half years in the fourth quarter, is firmly on the recovery path.

The average hedge fund rose 2.6 percent in January but this was behind the S&P's .SPX 4.5 percent gain, according to Hedge Fund Research, and some funds missed out on the rally after taking a cautious stance towards the end of a turbulent 2011.

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