India-focused funds log first weekly redemption in 19 mths

China resurgence, expensive valuation dim India appeal; midcap funds see 14th week of outflows

- SAMIE MODAK

India's stock markets are experiencing a shift in investor sentiment, with a 30 per cent surge in Chinese stocks, prompting investors to move money from domestic markets to China.

This reversal of fortunes is a notable change from the past three years, where China's losses benefited India.

According to Elara Capital, India-dedicated funds have seen their first redemption since March 2023, with $245 million being withdrawn.

In the preceding eight weeks, the average inflows were $300 million. It has slowed to $107 million in the previous week. India-dedicated funds have assets of over $80 billion.

China, on the other hand, is witnessing a sharp revival in foreign flows. China-dedicated funds recorded inflows of $9.3 billion this week, extending two weeks' tally to $15.5 billion.

Elara said the recent inflows into China have almost recouped 45 per cent of foreign redemptions from China funds since August 2023.