Asian stocks draw foreign buyers after 9-month selloff
Pedestrians are reflected on a stock quotation board showing a graph of Nikkei share average outside a brokerage in Tokyo, Japan April 14, 2025.
PHOTO: Reuters file
Foreign investors returned to net buying of Asian stocks in August, ending a nine-month selling streak as AI-linked tech stocks attracted buyers following a sharp July selloff and a strong earnings season.
Foreign investors bought a net US$4.72 billion (S$5.9 billion) of stocks in Taiwan, South Korea, India, Indonesia, Thailand, Vietnam and the Philippines last month, according to LSEG data. They added a further US$1.52 billion to regional equities through Tuesday's close this month.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 3.01 per cent last month from a three-and-a-half-month low of 797.6 in July, as upbeat guidance from Amazon, Microsoft and Nvidia pointed to strong demand for regional tech exporters.
Asian companies beat analysts' earnings estimates by an average 10.2 per cent in the latest quarter, posting 44.7 per cent year-on-year profit growth, while the technology sector recorded growth of 88.3 per cent, LSEG data for 2,108 large- and mid-cap companies showed.
"The latest foreign inflows appear to reflect a renewed AI allocation rather than a broad-based return to Asia," said Song Zhe, a senior investment specialist for Asia ex-Japan and global emerging market equities at BNP Paribas Asset Management.
Foreign investors bought a net US$11.15 billion of Taiwanese stocks last month, ending a two-month selling streak. South Korean stocks, however, recorded a fourth consecutive monthly outflow, totalling US$8.65 billion.
So far this month, foreign investors have added US$1.1 billion to South Korean stocks and US$1.45 billion to Taiwanese shares.
Foreign investors also bought a net US$3.1 billion of Indian stocks in August, marking a second straight month of net purchases.
Indonesian and Vietnamese stocks attracted inflows of US$68 million and US$11 million, respectively, while Thai and Philippine equities saw outflows of US$749 million and US$216 million.
"The return of the AI trade, improving technology earnings and cleaner positioning should favour North Asia, particularly Taiwan and selected Korean technology companies," BNP Paribas' Zhe said.
"Higher bond yields, oil prices and geopolitical risks may keep markets volatile, so we favour visible earnings upgrades and direct exposure to AI infrastructure."
[[nid:744877]]