New Delhi — India-focused fund outflows slowed to about $100 million, down from larger redemptions in previous weeks, while U.S.-dedicated funds recorded outflows of roughly $4 billion per week for a third consecutive week, according to a report from Elara Capital.
The report said incremental redemptions from Taiwan and South Korea have recently exceeded those from India, improving India’s and China’s relative flow performance over the past two months.
India-focused outflows moderated from $170 million, $270 million and $366 million in the previous three weeks.
“Long-only funds in India continue to record outflows, with cumulative inflows since September 23 now fully reversed. India’s flow trend therefore remains weak in absolute terms, but the relative picture is improving,” the report said.
Elara Capital also said global industrials are approaching a key technical support level, with the Global Industrial index having fallen back to its 200-day moving average.
“A decisive break below this zone could increase the risk of a sharper sell-off, given the precedent of previous breaks,” the report said.
On a rolling four-week basis, recent redemptions in Taiwan and South Korea were notable because they followed several months of strong and increasingly crowded inflows, the report said.
The firm added that the combination of crowded positioning and a sustained reversal in flows warrants closer monitoring.
Broader allocation strategies remained stronger, with Global and GEM funds attracting another $10 billion and $1.5 billion, respectively.
Foreign portfolio investors bought Indian equities worth nearly Rs 30,918 crore in August, including Rs 18,790 crore through exchanges and Rs 12,128 crore through the primary market and other channels.
August marked the second consecutive month in which FPIs were net buyers in India.
Analysts said FPI flows into India have been supported by a reversal in the chip trade, stability in the rupee and improving earnings growth. (Source: IANS)
