India vulnerable to FPI outflows if there is global scare over emerging markets: Credit Suisse

Indian markets remain vulnerable if there is a global scare over emerging markets, according to a Credit Suisse study.

According to the report, India's dedicated funds account for only 13 percent of the foreign portfolio flows, while 87 percent of flows come through global and emerging market (GEM) funds or sovereign wealth funds. So any fresh concerns over emerging markets can lead to outflow from GEM funds and hence from India.

The report adds that mutual funds and hedge funds accounted for three fourth of outflows from September 2021 to June 2022. However mutual funds have bought back most in the last three months. The study includes data from 6,300 funds accounting for 70 percent of mutual funds and hedge fund assets in India.