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HK flows expand to historic high; China at 5-month high; India redemptions at slowest level since Jan’25

Foreign fund used the recent correction in the US markets to increase allocation further; inflows expand to 5-week high of $7.9bn from $5.1bn in the previous week. The trend of US flows remains strong, and we are seeing inflows accelerating after the market correction. Inflows into Europe funds continue to remain strong for 3 rd month in a row as global investors gear up to play the big break out in Euro Stoxx 50 index (trading near highs made in 2000). Total inflow of $4bn this week & $12bn over previous 4-weeks. As mentioned earlier, this is the strongest streak of inflows into Europe since Jun 2021.

After a strong round of Dollar carry unwind from EMs lasting 4- months (Oct’24 onwards), flows are turning positive across most EMs except India. Foreign inflows into Hong Kong funds expanded to record high of $1.6bn. Inflows into China funds expand to 5-months high of $926mn. Likewise, Foreign inflows have resumed across S.Korea, Taiwan, Brazil, Mexico, Indonesia, Thailand, Singapore, Malaysia etc. over the past 3-weeks. Outflows from India also slowed down to lowest level since Jan’25; outflow of $113mn this week v/s average weekly outflow of $460mn since start of this calendar year.

India dedicated flows continue to remain under pressure since start of the current calendar year. We saw another redemption of $270mn this week. This is however lower than last 2-weeks outflows of $370mn and $425mn respectively. If it was not for the pressure from dedicated funds, India’s flows would have also turned positive. India dedicated funds saw outflows of $4bn since Oct’24 out of which $3.2bn have been taken out in CY25.

India dedicated outflows from US funds finally slow down to lowest level since Jan’25. This week only $15mn were taken out from US domiciled funds. Pressure was relatively stronger from Luxemburg ($86mn), Ireland ($59mn), UK ($49mn) and Japan ($32mn) funds.

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