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Domestic institutional investors turned cautious ahead of Tuesday’s federal budget, pulling a net $500 million from local shares last week.
The withdrawal is the biggest in more than six months, and likely played a part in the broad-based BSE 500 Index marking its first weekly drop since end-May on Friday, according to data compiled by Bloomberg.
Local mutual funds and insurance firms have been key drivers of the record-setting rally in Indian equities with purchases of over $25 billion this year, compared with about $4 billion from global peers. The 12% rebound in the Nifty 50 Index from the post-election selloff in early June likely prompted some domestic investors to take profit.
READ: A Stock Trader’s Guide to Modi’s Closely Watched India Budget
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