India fund outflows slow to $100 million

Elara Capital said India-focused fund outflows slowed to about $100 million this week, helping India outperform recent redemptions in Taiwan and South Korea.

Taiwan and South Korea redemptions

The report said US-dedicated funds recorded outflows for a third consecutive week at roughly $4 billion per week, while incremental redemptions from Taiwan and South Korea recently exceeded those from India. India-focused redemptions moderated from $366 million, $270 million and $170 million in the prior three weeks to about $100 million, the note said.

The firm added that broader allocation strategies remain firm: Global funds and global emerging-market (GEM) funds attracted roughly $10 billion and $1.5 billion, respectively, even as long-only India funds stayed net sellers and cumulative inflows since late September were reversed. The report cited foreign portfolio investors as net buyers in August, purchasing equity worth nearly Rs 30,918 crore, split about Rs 18,790 crore via exchanges and Rs 12,128 crore through primary market and other channels.

The report also flagged a technical risk in global industrials, noting the Global Industrial index has corrected to its 200-day moving average and saying a decisive break below that zone could increase the risk of a sharper sell-off.

Monitor flows through the week ending Sept. 18 for signs that redemptions in Taiwan and South Korea have stabilised or that the India relative outperformance reverses.