Narrowing equity market breadth, rising volatility and the prospects of rate hikes are the classic signs of a market top, BofA said in a weekly report on Thursday. Just five of the biggest U.S. technology stocks accounted for 71% of the nearly 20% gains in U.S stocks, BoFA analysts noted of the performance of shares in a weekly flows note based on EPFR data. A situation in which a tiny group of stocks powers gains while others lose ground is often viewed as an indicator that a rally is running out of steam. The picture was equally worrying for world stocks, with year-to-date returns from a global index excluding the top 300 U.S. growth stocks at a paltry 1.6% despite a record-breaking $1 trillion of equity market inflows so far this year. Volatility gauges are also signalling caution. While U.S (.VIX) and European stock market volatility gauges (.V2TX) have stepped back from 2021 highs hit earlier this week, they remain far above recent averages. And with major central banks led by the U.S. Federal Reserve expected to start increasing interest rates from next year, traders are getting worried about technology shares. Their stellar performance this year has been partially based on the view that interest rates will remain near record lows. "Hikes plus volatility plus divergences often a market top make," strategists at U.S. investment bank BofA led by Michael Hartnett said in a note. U.S. Treasuries saw their biggest inflows since October 2020 while investment-grade and high-yield bond funds saw large outflows. Cash funds saw the biggest weekly inflows at $27.1 billion, followed by equities at $9 billion. Short bonds and long equities trades this year have paid handsome dividends. But in a sign that investors are unwinding some of those trades, BofA said its private clients have trimmed their equity positions for the past three weeks, led by outflows from growth and industrial sectors.