(Bloomberg) --
India's smaller stocks declined in October for the first time in seven months, as foreign investors fled the market on the deepening global retreat from risk.
BSE Ltd.'s small and mid-cap indexes fell 1.7% and 3.4%, respectively, in the latest month. The declines came as overseas funds sold $2.6 billion of Indian equity in October, on a net basis, their biggest withdrawal since January. The small- and mid-cap gauges are still up more than 20% this year, outpacing the 5% rise in the benchmark S&P BSE Sensex.
The flight to safety amid rising interest rates and threat of recessions has hit smaller growth stocks and emerging markets particularly hard. With some local uncertainty ahead of India's national elections next year, traders may also have been tempted to take profits.
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