India, an investor favourite for much of last year, has seen investor sentiment sour as concern over the outlook for growth and earnings led investors to yank cash out of exchange-traded funds that buy local stocks.
The iShares MSCI India ETF, known by its ticker INDA, recorded $207 million in outflows last week, marking its third consecutive week of losses. Investors have pulled $571 million out of INDA so far this year, according to data compiled by Bloomberg.
Caution over India has increased as data signal that Asia’s third-largest economy is slowing. The latest government figures show gross domestic product will expand about 6.4 per cent in the current financial year, the slowest in four years. Indian stocks have also been under pressure amid a tepid earnings season, with few firms beating market expectations. “Concerns about the pace of the country’s growth trajectory and a slowdown in corporate earnings since the second half of 2024 have gone hand in hand to contribute to the weakness in sentiment,” said Roxanna Islam, head of sector & industry research at TMX VettaFi.