Foreign investors shifting focus away from emerging markets

With the US dollar strengthening due to the eurozone turbulence, the rupee is losing ground and foreign institutional investors (FIIs) are shifting their focus from emerging markets like India.
Analysts feel that the European debt crisis, which brought the euro to its lowest level in four years, coupled with a weak rupee, is leading to the FIIs cutting down their exposure in India. They are investing more in corporate and government bonds and gold in developed economies.
During the April-May period, the rupee has weakened by 3.5 per cent against the US dollar, while it had strengthened by 6.42 per cent against the euro in the same period.
“The Indian rupee continued its depreciation journey in the past fortnight as ongoing economic worries in the euro zone led to concern of another round of recession.