December 9, 2016

India Outflow: Deutsche Bank Says You Ain’t Seen Nothing Yet

If you thought November was ugly, brace yourself for even more outflows from Indian assets in December, according to Deutsche Bank AG.

Foreign funds pulled money from Indian stocks at the fastest pace since 2008 last month as Donald Trump’s surprise election win spurred expectations for more rapid interest-rate increases in the U.S. and Prime Minister Narendra Modi’s cancellation of high-denomination bank notes hurt cash-based business activity. The bond market wasn’t spared, with the biggest monthly exodus since the taper tantrum in 2013.

“We think that the worst of the outflows are not yet over,” said Abhay Laijawala, the head of research at Deutsche Bank in Mumbai. “The markets cannot stabilize until selling by foreigners abates.”


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