India’s stock market has stopped losing ground against other emerging markets, but foreign investors continue to withdraw money from India-focused funds. This comes even as global equity funds attracted $65 billion in the latest week, their highest inflows in four weeks, according to Elara Capital’s Global Liquidity Tracker.
The report said India’s relative performance against the emerging-market index bottomed out in June 2026 and has broadly stabilised since then. This suggests that selling specifically targeting India may be easing, even though foreign investors continue to pull money out. Some of the recent outflows may instead reflect a broader pullback from emerging markets.
India-focused funds saw average weekly outflows of $420 million over the past four weeks. Of this, $230 million came from traditional funds that invest directly in stocks, while exchange-traded funds (ETFs) accounted for the remaining $190 million.
US-based funds have been the biggest sellers of Indian investments, followed by funds based in Ireland. Outflows from India-focused funds have continued since August 2025, although the pace is now slower than during the peak selling seen in April and May 2026.
Global equity inflows rebound
The recovery in global equity flows was led by the US, which attracted $40 billion in the latest week. This followed average weekly outflows of $6 billion over the previous three weeks.
Funds investing in emerging markets also returned to positive territory, attracting $378 million after recording average weekly outflows of $390 million over the preceding four weeks.
South Korea attracted $1.1 billion in foreign inflows after five consecutive weeks of outflows. Taiwan, meanwhile, recorded its 15th straight week of foreign inflows. Elara Capital said selling pressure may have eased for now.
However, inflows into South Korea and Taiwan remain well below the levels seen earlier in 2026. Brazil has seen a stronger recovery, attracting $1.8 billion and $1.9 billion in foreign investment over the past two weeks — its biggest weekly inflows since January 2026.
Including money invested by domestic investors, Brazil received $2.4 billion in total inflows in the latest week, a record high.
Investors turn cautious on industrial stocks
The report also flagged a shift in global investment trends linked to artificial intelligence (AI). Industrial-focused funds have started seeing sustained outflows for the first time since the AI investment boom began in May 2025.
In the US, the industrial sector index has begun falling below its 200-day moving average, a widely watched measure of a market’s longer-term trend. The number of industrial stocks trading below this level has also risen to its highest since March 2025.
Technology funds, by contrast, continue to attract money. These funds, which offer more direct exposure to US technology stocks, received $10.7 billion in weekly inflows following the recent market correction — their highest in three months.
Elara Capital said the contrasting flows suggest investors are moving away from the wider group of businesses associated with the AI boom, rather than abandoning the core technology companies and large cloud-computing providers, known as hyperscalers.
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