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Foreign fund flow till Apr. the lowest since 2011
What has happened?
Government data showed that the Indian economy grew 7.2% in the quarter ended December 31 while the Chinese economy expanded by 6.8%.
Reasons
- Impact of higher oil prices, Indian banking system’s struggle with note ban, bad loans and polls among reasons
- Overall bearish sentiments towards emerging markets with India being no exception
Trade war
- There are tensions in West Asia, potential trade war concerns are escalating between the U.S. and China, oil prices are hovering around $75 levels plus dollar is strengthening
- So, the uncertainties are at dramatically high levels and it is impacting foreign flows into emerging markets
- Investors believe they can make more money investing in the U.S. as the interest rate there is also rising
