The recent trend of US funds pulling out $2 billion from India since October has raised concerns in the market about the impact on foreign portfolio investments (FPIs). This movement of funds is indicative of a larger shift from emerging markets to US funds, with India, China, South Korea, and Taiwan being the most affected.
The outflows from India funds, amounting to $637 million this week, have led to a slowdown in foreign investments in the country. Additionally, India-dedicated active funds experienced their worst weekly performance since August last year, declining by 4 per cent.
On the other hand, China funds witnessed the largest outflow of $1.2 billion, followed by South Korea, Taiwan, and Brazil. Overall, FPIs have withdrawn over ₹2.25 lakh crore from the Indian cash market since October, highlighting a significant shift in investor sentiment.
As the impact of these fund outflows continues to unfold, it is important for investors to stay informed about the latest developments and potential implications for the Indian market. Keeping a close watch on market trends and understanding the underlying factors driving these fund movements will be essential for making informed investment decisions in the current economic scenario.
