Asian flu

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* Over Prev Close Source Bloomberg

 India is not the only market seeing outflows: the total net redemptions from Asian funds are estimated to have trebled to $6.7 billion since the start of 2008 compared with the corresponding period of CY07.  If the Sensex lost 330 points on Thursday to close just above the 15,000 mark, the Chinese market crashed over 6 per cent and most other Asian markets ended in the red. It's clear that money is moving out of other Asian markets too; in what was the highest redemption in four months, outflows from offshore Asian funds rose to $ 1.4 billion in the week ended June 11, 2008.  That was way above the average outflow of $ 250 million in the two weeks prior to that, says EPFR Global. Risk premiums for the Asian markets are obviously still high even if the region has exhibited some resilience. While fund managers have been pulling out money from Korea and Malaysia for some time now, flows into the Taiwanese market, reversed after five months of inflows.  Redemptions from Global Emerging Market (GEM) funds, were the biggest in three months whereas the diversified global and international funds took in $ 0.8 billion worth of money.  According to a survey of fund managers put out by Merrill Lynch, GEM investors are positive on Russia but bearish on India and China. It's not surprising really that fund managers are lowering weightages for Asian economies: these countries will be the worst hit if crude remains at current levels of $136 and it won't make too much of a difference even if it retraces to levels of $110 per barrel. Unless oil prices reverse significantly, there's little chance of fund managers upping their allocations.  High oil prices will hit the Indian economy particularly hard because they will push up inflation