India Records First Weekly Inflows in Seven Weeks Amid Ongoing Global Liquidity Support

India Records First Positive Weekly Flow in Seven Weeks

India recorded a net inflow of $106 million, marking the first positive weekly flow in seven weeks. This comes after cumulative outflows of about $5 billion over the previous six weeks, with selling pressure from India-focused funds easing. Weekly outflows from these funds declined from a peak of $1.2 billion to $180 million.

Global Liquidity Conditions Remain Supportive

According to a Global Liquidity Tracker report by Elara Capital, global liquidity conditions have remained supportive for a fourth consecutive week following geopolitical de-escalation. Exchange-traded funds (ETFs) saw inflows of $220 million during the week, while long-only funds continued to witness outflows of $400 million. US-domiciled funds, which had been a major source of selling, recorded inflows of $225 million after seven consecutive weeks of outflows totaling $3.3 billion. India-dedicated strategies have now seen outflows for nine straight weeks.

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Globally, Major Fund Categories See Inflows

Globally, liquidity conditions have remained steady, supported by sustained inflows into major fund categories. The table below provides a comparison of inflows into different fund categories over the past month:

US equity inflows stayed in the range of $10 billion to $22 billion per week over the past month. Global-mandated funds recorded inflows of $16 billion, while Global Emerging Market (GEM) funds attracted $1-2 billion weekly. Emerging market growth funds also saw inflows of $1.4 billion, driven largely by Taiwan-focused strategies.

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Europe and China Continue to Experience Outflows

On the other hand, Europe and China continued to experience outflows over the past five weeks. Flows into commodity-related equity funds softened after strong performance during the period of geopolitical tension. Energy equity funds saw moderating outflows over the past three weeks, while gold flows stabilized at a slower pace compared to pre-conflict levels. Silver flows, however, remained weak and have not shown signs of recovery.