Asian equities recorded foreign outflows of over $10 billion in November as the AI rally stalled
Asian equities saw large cross-border outflows in the first week of November as investors booked profits on caution over high tech valuations and uncertainty over the sustainability of a prolonged market rally.
Data compiled by LSEG shows that foreign investors divested shares worth about $10.18 billion in Taiwan, South Korea, India, Thailand, Indonesia, Vietnam and the Philippines for the week ended November 7.
South Korean stocks saw net foreign outflows of $5.05 billion last week, reversing foreign inflows of $4.21 billion in the previous month.
Taiwan shares recorded cross-border net sales of $3.86 billion, exceeding outflows of $3.21 billion in October.
“Foreign outflows in Korean and Taiwan equities were primarily driven by weakness in leading AI-related companies, which is consistent with global challenges in other markets such as Japan and the United States,” said Jason Lui, head of APAC equity and derivatives strategy at .
The MSCI Asia ex-Japan information technology sector index lost 4.23% last week after posting a 62.5% gain in the six-month period to October. MSCI’s global information technology sector index slumped 4.38% in the previous week.
“Renewed concerns about rising tech valuations have fueled volatility, but strong fundamentals suggest current levels are justified,” Mark Haefele, chief investment officer, said.
“We forecast 15% revenue growth for global technology this year, followed by a solid 12.5% increase in 2026.”
LSEG data shows that the MSCI Asia Pacific ex-Japan index had a forward 12-month PE ratio of 15.81, at the end of October, the highest since June 2021.
Meanwhile, Indian equities recorded foreign outflows of $1.42 billion last week after seeing inflows of $1.66 billion in October.
“India is now the country with the largest weighting in GEM’s portfolio and only a quarter of the funds we monitor are overweight India relative to their benchmark,” according to a report last Friday.
“We see India as a country capable of protecting the value of AI and providing diversification for those who are uncomfortable with the rise of AI. India would be a huge beneficiary if additional funds flow into developing regions,” the report said.
Vietnam and Thailand shares also saw foreign outflows of $95 million and $40 million, respectively, while Indonesia and the Philippines attracted foreign inflows of $207 million and $77 million, respectively, in the previous week.
Source: Reuters
