Foreign investors have dumped Indian stocks during the Iran war at the fastest pace on record, as surging energy costs send the rupee to historic lows and raise fears of a ballooning current-account deficit.
Overseas investors have pulled almost $21bn from Indian stocks since the US and Israel started bombing Iran on February 28, including almost $13bn in March, by far the biggest monthly outflows on record according to securities depository NSDL.
The rupee has fallen to a historic low of more than 95 to the dollar, having entered the war at about 91. Bond prices have slumped, sending 10-year government borrowing costs for the world’s fastest-growing major economy to an all-time high above 7.1 per cent in late April, from 6.7 per cent before the conflict.