Listed global funds poured $1.3 billion into India’s equity markets in September despite rising bond yields and the hawkish commentary by the US Federal Reserve.
“Listed funds witnessed $1.3 billion of inflows in September, led by non-exchange traded funds (ETF) inflows of $933 million. India-dedicated funds witnessed inflow of $2.2 billion, led by non-ETF inflows of $1.7 billion, whereas global emerging market (GEM) funds saw outflows of $574 million, led by non-ETF outflows of $455 million,” said a note by Kotak Institutional Equities (KIE), quoting data from EPFR, a flow tracker.
The strong inflows from listed funds into the domestic markets come on the back of an increase in India’s weightage.
Interestingly, despite the strong inflows from listed funds, overall foreign portfolio investors (FPIs) pulled out nearly $500 million from the domestic equities, data provided by NSDL revealed.
The outflows—which were on account of selling by hedge funds and other funds not tracked by EPFR—were due to the risk off sentiment triggered by rising US yields.
The 10-year Treasury yield rose to as much as 4.69 per cent in September from a low of 3.97 per cent in August.
The KEI note says the divergence in overall FPI flows and EPFR activity was not just restricted to India but South Korea and Taiwan as well. However, there divergence between the two data sets isn’t that wide on a year-to-date basis.
First Published: Oct 26 2023 | 5:32 PM IST