Foreign investors pulled $580 million from Indian equities in the latest week as global investors continued to pare exposure to emerging markets amid signs of slowing global liquidity, according to Elara Securities' Global Liquidity Tracker.
India-focused funds accounted for $250 million of the weekly withdrawals, while the balance came through broader Global Emerging Markets (GEM) and Asia ex-Japan (AXJ) allocations. Total weekly outflows widened from $94 million in the previous week.
Even so, Elara said the recent selling remains significantly below the heavy March-April outflows, when India witnessed average weekly withdrawals of nearly $1 billion.
The pullback comes amid a broader shift in global fund flows. U.S. equity funds recorded $17 billion in redemptions during the week, following $8 billion of outflows a week earlier, after attracting a record $120 billion of inflows just three weeks ago. Exchange-traded funds accounted for $9 billion of the latest withdrawals, the first ETF outflow since March.
The report said GEM funds extended their losing streak to a ninth straight week, with outflows accelerating to $2 billion from $500 million a week earlier. "The emerging market allocation trade that gathered pace during April-May 2025, driven largely by artificial intelligence-related positioning, appears to be losing traction," Elara said.
Among emerging markets, Taiwan saw an 11-year high foreign fund outflow of $766 million, while South Korea recorded withdrawals of $283 million. Brazil remained the weakest market, with nearly $2 billion pulled out over the past seven weeks.
Sectoral flows also reflected weaker risk appetite. Global commodity equity funds logged an eighth consecutive week of outflows worth $1.5 billion, while energy funds saw a record $3.2 billion in redemptions.
ALSO READ: IT Sector Q1 Preview: Weak Growth, AI Commentary, FY27 Outlook In Focus
Gold funds witnessed $3.1 billion of outflows, the highest in 14 weeks, while silver fund flows remained broadly stable.
"The simultaneous retreat from U.S. equities, emerging markets and commodity-linked funds suggests the liquidity-driven rally across global markets is beginning to lose momentum as investors turn more cautious," Elara said.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
