Investors are accelerating their flight from the largest US-listed exchange-traded fund tracking Indian equities, as concerns mount over the impact of the global energy crisis on the Asian economy.
The $6.4 billion iShares MSCI India ETF recorded over $220 million in withdrawals on Monday alone, its largest single day outflow since April 2025. That extends what has been a streak of five consecutive weeks of withdrawals that now total over $2 billion, according to data compiled by Bloomberg.
Photo Credit: Bloomberg
The conflict in the Middle East has driven a selloff in Indian assets over the past month as concern grows over the country's reliance on fuel shipped through the Strait of Hormuz. India imports roughly 90% of its crude oil and nearly 50% of its liquefied petroleum gas, with about half of that crude and over three-quarters of the LPG transiting the Strait of Hormuz, which Iran has effectively shut.
The NSE Nifty 50 Index fell over 11% in March alone, pushing the index near levels last seen during the market turmoil after the US tariff rollout a year ago. The rupee, meanwhile, weakened over 4% against the dollar in that same period.
“Against this uncertain backdrop, we have been advising investors to progressively de-risk portfolios,” Ulrike Hoffmann-Burchardi, CIO Americas and Global Head of Equities at UBS Global Wealth Management, wrote in a note. “We have become more cautious on equity markets that are highly sensitive to disruptions to energy supplies, including Europe, the Eurozone and India.”
UBS Global Wealth Management recently downgraded Indian stocks to neutral, citing the market's sensitivity to elevated oil prices. On top of that, investors' jitters about India's high valuations, the risk of AI disruption and currency weakness also weighed on sentiment.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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