India fund outflows ease as Taiwan, South Korea see sharper redemptions: Elara

According to fresh market updates, Foreign fund outflows from India continued for another week but moderated sharply, while Taiwan and South Korea witnessed heavier redemptions after months of firm inflows, according to Elara Securities’ latest Global Liquidity Tracker.

India-focused funds saw outflows of around $100 million in the latest week, compared with redemptions of $170 million, $270 million and $366 million in the preceding three weeks.

The pace of outflows has as a result eased, although the broader flow picture for India stays weak. Long-only funds keep see redemptions, with cumulative inflows into India since September 2023 now fully reversed, the tracker stated.

That stated, India's relative position has improved as fund flows into other Asian markets have deteriorated. Taiwan- and South Korea-dedicated funds have now recorded outflows for five consecutive weeks. The recent redemptions are notable as they follow several months of firm inflows, which had additionally made positioning in these markets increasingly crowded.

Incremental redemptions from Taiwan and South Korea have recently exceeded those from India, resulting in relative flow outperformance for India and China during the past two months, according to Elara.

US funds see third straight week of outflows

US-dedicated funds recorded outflows for the third consecutive week, marking the first such streak since May 2025. The scale of redemptions, that stated, stays relatively modest at around $4 billion a week, suggesting early signs that the selling pressure may be losing momentum, Elara stated.

Flows into broader allocation strategies remained firm. Global funds attracted another $10 billion, while Global Emerging Market (GEM) funds received inflows of $1.5 billion.

The divergence points to continued investor appetite for diversified global and emerging-market strategies even as country-specific funds in several markets face redemptions.

Global industrial funds see redemptions

Global industrial funds have additionally continued to witness redemptions, with the outflow trend persisting for several months. At the same time, the Global Industrial index has corrected towards its 200-day moving average, a level that has provided backing on multiple occasions historically. A decisive break below this zone could raise the risk of a sharper sell-off, based on the precedent of previous breaks below the 200-day moving average, Elara stated.

For India, the latest data points to an improvement in the pace of outflows rather than a return of sustained foreign inflows. The relative improvement in flows has largely come as redemptions from Taiwan and South Korea have accelerated, even as long-only market participants keep pull money from India-focused funds.