India experienced a net inflow of $106 million in the latest week, marking the first positive weekly flow in seven weeks. This turnaround follows cumulative outflows of nearly $5 billion over the previous six weeks, indicating a gradual easing of selling pressure from India-focused funds. Weekly outflows from such funds significantly decreased from a peak of $1.2 billion to around $180 million.
Exchange-traded funds (ETFs) played a crucial role in the recovery, attracting inflows of $220 million during the week. However, long-only funds continued to witness outflows of approximately $400 million. US-domiciled funds, previously a significant source of selling, recorded inflows of $225 million after seven consecutive weeks of outflows totaling $3.3 billion.
Despite these positive developments, India-dedicated strategies have faced outflows for nine consecutive weeks. Globally, liquidity conditions have remained supportive for the fourth straight week, with steady inflows into major fund categories. US equity funds received inflows ranging from $10 billion to $22 billion per week over the past month, while global-mandated funds attracted $16 billion, as per the report.
Global Emerging Market (GEM) funds continued to attract inflows of up to $2 billion weekly, with emerging market growth funds seeing inflows of $1.4 billion. On the other hand, Europe and China have experienced outflows over the past five weeks, showcasing divergent regional trends. Flows into commodity-related equity funds have softened post strong gains during heightened geopolitical tensions. Energy equity funds observed moderating outflows, while gold inflows stabilized at a slower pace, with silver-related flows remaining weak.
