FILE PHOTO: People are silhouetted as they pose with mobile devices in front of a screen projected with a Facebook logo, in this picture illustration taken in Zenica October 29, 2014. REUTERS/Dado Ruvic/File Photo

LONDON (Reuters) - Investors poured $600 million in to U.S. technology stocks in the week leading up to poor results from Facebook FB.O, according to Bank of America Merrill Lynch (BAML) analysts, urging clients to sell the sector on signs inflows have reached bubble territory.

Facebook’s shares plunged 19 percent on Thursday - leading to the biggest one-day wipeout in value terms in U.S. stock market history - after the company said it faced a multi-year squeeze on its business margins.

But flow data covering the week to 25 July showed little drop in demand as investors continued to hunt for returns after a decade of quantitative easing, BAML said.

Funds investing in technology have pulled in $36 billion this year, the data showed, by far the largest on record.

Facebook's shock results were a "classic late-cycle event," analysts at the bank wrote, calling investors' preference for FAANG stocks - the quintet of Facebook, Amazon AMZN.O, Apple AAPL.O, Netflix NFLX.O and Google GOOGL.O - "the most crowded QE trade in the world".

In contrast, the Chinese government’s increasing wariness over a trade war with the U.S. provided an ideal entry point into emerging markets, particularly the BRIC nations of Brazil, Russia, India and China, BAML said.

In the last three months China has cut its Reserve Requirement Ratios twice, devalued the yuan CNY= by 7 percent, as well as widespread tax cuts and local bond issuance - all possible signs it is worried about global trade.

“Markets stop panicking when policy makers panic,” analysts at BAML said, saying long BRICs against short FAANGs was a good trade for the third quarter.

The bank also recommended clients buy gold XAU= and products hedging against a rise in volatility .VIX, in preparation for a potentially difficult end to the year for investors.