Indian stocks: Broader Emerging Markets-led redemptions come back to bite

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Published: September 23, 2015 12:55:24 AM

NSE index falls more than 2 pct, marking it biggest single day fall in more than two weeks and erasing more half the gains seen since the Sept 7 lows.

** India’s NSE index falls more than 2 pct, marking it biggest single day fall in more than two weeks and erasing more half the gains seen since the Sept 7 lows

** FIIs net sellers in the previous session if adjusted for a block deal in L&T Finance in which Citi bought – Reuters Calculations

** FIIs are headed towards their fourth month of sales in Indian stocks in five NSDL data shows

** Fund managers, institutional dealers cite redemption pressures in marquee names such as HDFC, TCS, Infosys and ICICI Bank

** India still trades at heavy valuation premium to rivals as relatively healthier macro picture pushes GEM/Asia-focused funds into country’s equities

** Continued bleeding in EM funds, where India still remains the biggest “overweight” position by far, combined with a weakening rupee and rich valuations relative to earnings growth has meant offshore investors are on the retreat

** EM equity funds suffered an 11th straight week of outflows in the week ending Sept 9, with a total of $38 bln leaving over that period, brokers said, citing EPFR data

** Also, DII war chest isn’t enough to counter FII selldown

** Macquarie, Barclays, Deutsche Bank and Ambit had slashed India’s targets earlier citing delay in earnings recovery

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