India has emerged as one of the most prominent victims of November’s market turmoil.
The twin shocks on Nov. 8 of Donald Trump’s U.S. election victory and Indian Prime Minister Narendra Modi’s currency crackdown have unleashed a wave of selling in stock and foreign-exchange markets. It is the latest reversal for Western investors banking on an economic revival in the world’s second-most populous nation.
Mr. Modi has announced plans to replace India’s largest-denomination bank notes with newly designed ones in an effort to clamp down on corruption, thwart counterfeiters and fight tax evasion.
Since Nov. 8, the MSCI India stock index has dropped 7.1%, vs. a 4.9% decline in emerging markets more broadly, according to MSCI Inc. The rupee has lost more than 3%, hitting an all-time low last week against the dollar.
Foreign investors have pulled $2.6 billion out of Indian shares in November, compared with a net investment of $7 billion between January and October, according to Indian regulatory data.