Investors pulled out a net $7.68 billion from global equity markets last week, with emerging markets accounting for $2.65 billion of the total outflows.

The huge outflow has been attributed to the continuing nuclear crisis in Japan, coupled with civil unrest in the Middle East and North Africa.

During the week ending March 23, equity funds lost $7.68 billion, with emerging market funds accounting for $2.65 billion of the outflows.

Emerging market equity funds are off to a terrible start this year, having lost about $27 billion so far in 2011, according to data compiled by international fund tracking firm EPFR.

The report noted that as the week progressed, investors began to return to equities. However, this shift was not enough to negate the outflows that occurred earlier in the week as engineers were struggling to limit radiation leaks from the stricken Japanese plant and military enforcement of the “no fly” zone in Libya commenced.

In recent months, many emerging markets, including India and China, have been grappling with high rates of price rise, which also poses the threat of derailing the fragile global economic recovery.

Furthermore, Europe and emerging Europe equity funds both experienced above average redemptions during a week that saw Portugal’s government collapse.

However, the EPFR did not disclose specific outflow figures for India-focused funds. According to information available with SEBI, foreign institutional investors (FIIs) pulled out about $114.83 million from the Indian market during the period.

In a brief reversal of the overall bearish trend, investors pumped in a net $8 million into emerging market-dedicated equity funds in the week ended March 9, ending a six-week losing streak that began in mid-January on the strength of investor’s appetite for exposure to Russia’s energy story.

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