People walk by a currency exchange house in Buenos Aires, Argentina, July 11, 2022. (Photo: CFP)

Investors poured a record $12.7 billion into emerging-market debt and equity funds in the week to Wednesday, in response to China's easing of its COVID-19 restrictions on activity, data on Friday from BofA Global Research showed.

The policy change boosted many different asset classes, from commodities and mining stocks to currencies and equity markets in popular tourist destinations.

Hong Kong's share market benchmark, the Hang Seng Index, closed on Friday at an over six-month high ahead of the Lunar New Year Holiday. Chinese onshore blue chips went into the break at a five-month peak.

BofA's "Bull & Bear" indicator is at 3.5, a 10-month high driven by the inflows into emerging markets.

The research firm also noted that markets are still facing several major uncertainties despite recent optimism, as central banks near the end of their aggressive interest rate hikes, as well as the possibility of an economic "hard landing" and political tension in the United States around its debt ceiling.

"We are in the trickiest part of the investment cycle: tightening ending but easing far from beginning, inflation over but recession not yet begun, China re-open vs U.S. recession … little wonder Wall Street narratives [are] changing quicker than a TikTok video," it said.