Foreign investors pulled a net $25.48 billion out of seven Asian markets in July, marking a ninth straight month of outflows. Taiwan and South Korea bore the brunt as AI-spending worries hit their chip-heavy markets, while India, Thailand, Indonesia and the Philippines drew inflows instead.
Foreign investors sold Asian equities on a net basis for a ninth consecutive month in July, with heavy selling concentrated in Taiwan and South Korea as concerns over AI spending and chip demand weighed on the region's technology-heavy markets.
The pressure on regional tech exporters followed negative cash flows reported by Alphabet and Tesla, which raised worries over the durability of growth and mounting cash burn among AI-linked companies.
Taiwan and South Korea take the heaviest hit
Foreign investors sold a net $25.48 billion worth of stocks across South Korea, Taiwan, India, Indonesia, Thailand, Vietnam and the Philippines last month, according to LSEG data.
Taiwan accounted for $22.95 billion of the outflows, following June's roughly $8 billion in outflows. South Korea saw another $6.26 billion leave the market, marking a third consecutive month of outflows there. Vietnamese stocks also recorded marginal foreign outflows of $12 million last month.
BNP Paribas analysts said in a July note that AI heavyweights in South Korea and Taiwan faced selloffs as investors started to question their chip-demand forecasts and debt-repayment ability, adding that China's Moonshot announcement about its low-cost AI models worsened negative market sentiment.
India, Southeast Asia buck the trend
Equities in India, Thailand, Indonesia and the Philippines logged foreign inflows of $2.12 billion, $1.46 billion, $88 million and $69 million, respectively, partly offsetting the withdrawals elsewhere in the region.
Herald van der Linde, head of equity strategy for Asia Pacific at HSBC, said in a note last week that the unusually high swings in AI-related sectors are making global investors diversify, and that on that measure he thinks India looks better placed. According to HSBC: "We recently upgraded India to neutral within Asia."
Source: Investing.com
Trading involves risk.
Risk Disclaimer
