Overseas funds sold around a net $630 million in Indian shares and bonds on Wednesday, marking their biggest single-day sales since January 2014, reinforcing fears that an emerging market darling is losing its allure.
The single-day sell-off, according to preliminary data from exchanges and depositary data, is the biggest since foreign investors sold around a net $877 million on Jan 27, 2014 when emerging markets were gripped by US rate hike fears, Thomson Reuters calculated.
It marks the culmination of weeks of selling by foreign investors, which analysts have mainly attributed to the uncertainty created by the minimum alternate tax (MAT) that is being demanded from some overseas funds.
Indian shares and bonds have wiped out their entire gains for the year over the past few weeks, with the broader Nifty down 11% since hitting a record high on March 4.
Meanwhile, the rupee on Thursday fell below 63.90 per dollar, its weakest since Sept 13, 2013.
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