INSUBCONTINENT EXCLUSIVE:
The outbreak of novel coronavirus is choking flows into Indian stocks from foreign funds domiciled in Japan, Germany, South Korea and China,
said people with direct knowledge of the matter
With the daily functioning of most of these funds in these countries disrupted due to office closures and travel bans, money managers have
been deferring investment decisions, waiting for the virus to subside.
The four countries put together are home to over 1,500 funds which
Total derivative trading volume fell 22 per cent in February while cash markets saw the total volumes go down by 2 per cent
The benchmark Nifty has fallen 7 per cent since February 20.
Most of the big-ticket FPIs in India are large mutual funds from these
Their trades depend on the investments coming from various local funds.
Japan and South Korea are the countries which saw the biggest dip in
trading volumes, market participants said
After the government did away with the tax benefits in case of Mauritius, several big funds set up a part of their operations in South
Korea, since it still enjoys beneficial tax agreement with India.
The coronavirus has infected more than 95,000 people and killed at least
3,300 worldwide, according to reports
After the virus was first identified in China in the last week of December, it has spread to countries such as South Korea, Japan, Iran,
to remain tepid for at least another month as most of these countries are awaiting the outbreak to be contained