LONDON - Hedge funds continued to take bets against bank and financial stocks in the week to Friday, Goldman Sachs wrote in a note seen by Reuters on Monday, amid reported job cuts and reduced dealmaking.

Financial stocks ended the week as the most net sold sector at Goldman Sachs' prime brokerage trading desk, which serves global hedge funds, the note said.

Banks, insurance companies, publicly traded property trusts and capital markets firms which allow people to buy and sell bonds and stocks were all sold on a net basis for the fourth straight week.

A short position bets that an asset price will decline in value, whereas a long position expects it to rise.

Europe's STOXX 600 banking index has risen 1.7% since August 26, whereas the Dow Jones banking index closed Friday up over 2% for the week ahead of Monday's U.S. holiday.

Financials as a stock sector were sold in six out of the last seven weeks, said the Goldman Sachs note.

The selling was global, led in notional terms by North America, developing markets in Asia and Europe, the note said.

While total deal values globally have risen by about a fifth, the number of mergers and acquisitions deals has fallen by 25% for the year to June 25, LSEG data shows.

Hedge funds carried out modest net buying in consumer finance, said the Goldman Sachs note.

(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Hugh Lawson)