Foreign investors are cutting their holdings in India’s state-controlled companies to a three-year low as Prime Minister Manmohan Singh’s government sacrifices shareholder return to revive the weakest economy in nine years.
Indian shares traded in New York dropped the most in a week, following shares in Mumbai lower, amid concern the nation’s budget lacks measures to curb expenditure key to containing the fiscal gap. Stock futures fell in Singapore and rupee forwards sank to near a six-week low.
Foreign investors withdrew the most money from Indian stocks in June in about two years on concern the nation’s public finances will worsen when the U.S. Federal Reserve starts tapering its monetary stimulus.
ICICI Prudential Asset Management Co., India’s third-largest money manager, is picking exporter stocks as concerns the U.S. will phase out stimulus caused the rupee to plunge and foreign funds to dump equities and debt.
Egypt’s borrowing costs are rising to the highest in more than two years and stocks listed overseas are tumbling as the Cairo exchange’s five-week shutdown and new rules on shareholder disclosure keep investors away.