Global Funds Flee Indian Stocks at Record Pace on Growth Fears

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full-year record outflow of $18.79 billion seen in 2025, according Central Depository Services India Ltd. The sustained selling has kept markets under pressure, and even a modest rebound following a temporary ceasefire earlier this week has done little to lift the mood. Local shares remain bruised, with over $600 billion wiped off their value from last year’s peak.India’s $4.8 trillion equity market is losing some of its relative appeal, as global capital rotates toward artificial intelligence-linked economies where semiconductor demand is the bigger driver. The oil crisis has magnified existing concerns for the country — from recent rupee volatility to a still-fragile earnings recovery — while also underlining another problem: a lack of a clear catalyst to bring foreign money back.“Indian stocks are missing a narrative,” said Abhishek Thepade, an Oslo-based portfolio manager with DNB Asset Management AS. “Earnings are undergoing a cyclical slowdown while weakening currency and impact of artificial intelligence on local software companies also impacts the outlook.”Although tech-heavy South Korea and Taiwan saw larger headline outflows in March — totaling $24 billion and $29 billion respectively — the peace deal may given them a stronger boost by refocusing investor attention on AI-driven chip demand, a factor largely absent in India.That gap is already showing up in flows. South Korean and Taiwanese equities have seen inflows of $3.6 billion and $5.6 billion, respectively, so far this month. In contrast, global funds have pulled $3 billion from Indian equities, data compiled by Bloomberg show.To be sure, domestic money continues to cushion the blow. Mutual funds and institutions have poured in $31 billion this year, with retail investors doubling down via record inflows into monthly equity investment plans last month even amid heightened volatility. Still, that support has not been enough to counter persistent foreign selling.Some investors see scope for a reversal once the Middle East tensions ease. “Now that India’s valuations have become reasonable, foreign flows could return once the current geopolitical uncertainty settles, though the timing remains uncertain,” said Harsha Upadhyaya, chief investment officer for equities at Kotak Mahindra Asset Management Co.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoTrending tickersBTC-USD Bitcoin USD 71,722.76 -1,061.02 (-1.46%)ETH-USD Ethereum USD 2,218.73 -16.03 (-0.72%)CL=F Crude Oil May 26 96.57 -1.30 (-1.33%)XRP-USD XRP USD 1.33 -0.02 (-1.33%)BTC-CAD Bitcoin CAD 99,289.40 -1,468.81 (-1.46%)PortfolioSign in to access your portfolioSign inTop gainersOGN Organon & Co. 8.83 +1.92 (+27.79%)XNDU Xanadu Quantum Technologies Limited 8.96 +1.31 (+17.12%)ALAB Astera Labs, Inc. 149.05 +19.59 (+15.13%)MANE Veradermics, Incorporated 68.80 +8.82 (+14.70%)TTMI TTM Technologies, Inc. 121.49 +13.96 (+12.98%)Top losersFSLY Fastly, Inc. 23.07 -6.39 (-21.69%)AKAM Akamai Technologies, Inc. 91.35 -18.26 (-16.66%)FICO Fair Isaac Corporation 922.37 -149.98 (-13.99%)SEZL Sezzle Inc. 59.71 -9.42 (-13.62%)NET Cloudflare, Inc. 166.99 -26.06 (-13.50%)Most activeNVDA NVIDIA Corporation 188.63 +4.69 (+2.55%)PLTR Palantir Technologies Inc. 128.06 -2.48 (-1.90%)HOLX Hologic, Inc. 76.01 0.00 (0.00%)INTC Intel Corporation 62.38 +0.66 (+1.07%)NOK Nokia Oyj 9.46 -0.09 (-0.94%)Top economic eventsEarnings eventsMy earnings eventsEarnings events