FII inflows hit by Euro crisis

In a written reply to Rajya Sabha question, he, however, said India’s economic fundamentals were strong.

Investors globally pulled out $2.7 billion from the emerging market-focussed funds during the week ended November 23, amid concerns of worsening debt crisis in Europe.  
According to reports, foreign institutional investors have pulled out close to $500 million from India since November 15 this year.

Continuous withdrawal of  FIIs has also led to market crash in the recent times. Foreign funds have heavily sold Indian shares in September and October, putting more pressure on the rupee. The sharp decline in rupee has been driven by capital outflows amid Euro-zone crisis.

The increased uncertainty in the Euro-zone on account of sovereign debt crisis has led to shifting of capital from Europe to the US and this has hardened the dollar against most currencies.