Foreign investors withdrew $49.77 billion from seven Asian equity markets in October, LSEG data showed, as doubts about AI investment returns and constraints on data center construction weighed on technology-linked stocks, Reuters reported.
Regional shares fell more sharply than global equities. The MSCI Asia Pacific ex-Japan index lost 6.91% in October, while the MSCI All Country World Index declined 1.69%, Reuters reported. BNP Paribas Asia-Pacific equity derivatives strategist Scarlett Liu said some investors may have shifted toward U.S. markets, where the S&P 500 held up better, or toward government bonds as the 10-year U.S. Treasury yield reached 5.3% in early October.
Reuters’ market breakdown put Taiwan’s October net foreign outflow at $30.68 billion, its largest monthly net outflow since at least Jan. 2008. South Korea recorded $14.59 billion in net foreign sales. Together, the two markets made up $45.27 billion of the seven-market total.
Indonesia and Thailand also saw net outflows, of $938 million and $199 million, respectively. Vietnam and the Philippines recorded net inflows of $122 million and $109 million, Reuters reported.
India had a second consecutive month of foreign equity outflows in October, totaling $3.6 billion. Investors recorded $5.68 billion in net inflows into Indian equities so far in November, following a brief two-session buying streak in Indian equities on Oct. 28.
Wael Makarem, lead financial market strategist at Exness, told Reuters that investors had become less certain about the returns on AI infrastructure spending. He said tighter environmental reviews and regulation were seen as potential barriers to data center construction and chip demand ahead of the U.S. midterm elections. Reuters reported that Democratic victories, including in states where opposition to new data centers has grown, kept those concerns in focus.
Reuters also reported a further $22.6 billion in net foreign withdrawals from the seven markets so far in November.
