Big banks pulled $2B from India in 2011

So you've been sticking your 401K money into emerging markets on fears that the US is set for Japan-style stagnation for the next 20 years? Well, so were the world's largest institutional investors — until recently.

Big investors have pulled $21 billion out of emerging markets on worries about soaring inflation since the beginning of 2011 according to data put out by fund tracker EPFR, reports the Indian Express. And India is taking some of the heaviest losses.

Despite rosy forecasts of 8-plus percent economic growth this year, foreign institutional investors (FIIs) have pulled out close to $2 billion from the Indian market since the start of the year after pumping in a record $29 billion in 2010, writes the paper. FIIs are now concerned about sustained high inflation due to soaring crude prices, slowing growth and policy paralysis in the government.