The strained diplomatic relations between Canada and India also had an impact on the capital markets.
Canada-based pension funds such as CPPIB and CDPQ are the largest institutional investors in some of India's leading companies, with investments in 70 other listed companies.
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Amid rising political tensions, stocks of Canada Pension Fund investees Kotak Mahindra Bank, Zomato, Indus Tower, Naika saw a sell-off and fell as much as 2.4 percent each on Thursday.
According to market analysts, this is unlikely to affect the stocks in the long run.