Indian financial markets face dual pressure from equity outflows and weakening currency amid trade tensions with United States

Indian markets are under stress as the rupee approaches record lows and bond yields climb. Foreign investors have pulled $2 billion from equities this month.

Insights:
Indian financial markets are grappling with simultaneous pressure from significant portfolio outflows and a weakening currency as trade tensions between India ININand the United States USUScontinue to mount. The Indian Rupee / US Dollar closed at 90.8650 per dollar on Friday, representing a 0.7 percent depreciation on a week-on-week basis. This decline brings the currency precariously close to its all-time low of 91.0750, which was recorded in December. The downward trajectory of the currency comes as foreign investors have withdrawn approximately $2 billion from Indian equity markets, including the Nifty 50 Index , throughout January.
A man walks past an installation of the Rupee logo and Indian currency coins outside the Reserve Bank of India (RBI) headquarters in Mumbai, India, April 9, 2025. REUTERS/Francis Mascarenhas/File Photo
A man walks past an installation of the Rupee logo and Indian currency coins outside the Reserve Bank of India (RBI) headquarters in Mumbai, India, April 9, 2025. REUTERS/Francis Mascarenhas/File Photo
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