Global investors are continuing to pull money out of India and other emerging markets as investment flows increasingly move toward US technology and semiconductor companies. According to a recent global liquidity report by a financial research firm dated May 29, India has now recorded 7 consecutive weeks of foreign outflows.
The report stated that cumulative foreign investor withdrawals from India reached $463 million during this period. Emerging markets overall remain under pressure, with investors reducing exposure amid growing preference for US-based AI and semiconductor stocks.
For the first time in 8 weeks, global equity flows also turned negative, with total redemptions nearing $7 billion. The report said major outflows were seen from China and Japan, while Europe also continued to witness investment pressure.
“EMs continue to remain under pressure, with the 7th week of redemptions led by domestic selling in China and persistent foreign outflows from India,” the report said.
Global Emerging Market funds also recorded their fourth straight week of outflows, taking total redemptions to $4.2 billion. Analysts said this reflects a noticeable slowdown in investor appetite for emerging markets.
The report highlighted that the AI-driven investment trend, which earlier benefited multiple global markets, is now becoming heavily concentrated in the US. “Liquidity continues to concentrate into a much narrower set of opportunities,” the report noted.
It also pointed to early signs of weakening investor momentum in countries that previously led the AI-driven rally. South Korea’s foreign investment flows turned negative for the first time since June 2025, while Taiwan and Brazil reported their weakest flows since the AI boom began.
Commodity and precious metal sectors are also witnessing weaker investor interest. Precious metal funds recorded another $1.1 billion in outflows this week, while commodity equity funds have seen redemptions worth $9.6 billion since March.
The report added that sectors linked to AI and electrification, including commodities, energy, South Korea, Taiwan, Brazil, gold, and silver, are now seeing slower or negative investment flows. US technology, industrial, and semiconductor companies remain the only sectors witnessing strong capital inflows.
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