Spooked by prospects of another round of rate hikes, investors are dumping India exchange traded funds, with Indian stocks recording their first weekly loss in five weeks.

The iPath MSCI India ETN (NYSEArca: INP) dropped 3.0% Friday, while the PowerShares India Portfolio (NYSEArca: PIN) and WisdomTree India Earnings ETF (NYSE: EPI) both declined 3.7%.

India stock indices plunged to a three-week low Friday after speculation that Reserve Bank of India’s Governor Raghuram Rajan would raise interest rates to further combat inflationary pressures, Indian Express reports. [India ETFs Dive on Rate Surprise]

Raghuram Raja upped the repo rate last week to help depress inflation.

“Markets were negatively surprised last week by the 25 bps repo rate hike by the RBI,” Dipen Shah, head of the Private Client Group Research at Kotak Securities, said in the article. “Consequently, most of the banking and other interest rate sensitive stocks under-performed for the week.”

Foreign interest in Indian stocks has also been down due to the weak Indian rupee currency. The WisdomTree Indian Rupee Fund (NYSEArca: ICN) was down 1.8% Friday.

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