Foreign investors pulled heavily out of Asian stocks in January, deterred by higher US Treasury yields and rising concerns that regional exports could suffer under additional tariffs from President Donald Trump's administration, reports Reuters.
Foreigners divested stocks worth $12.5 billion, on a net basis, in India, Taiwan, South Korea, Thailand, Indonesia, Vietnam and the Philippines in January, their third monthly net sales in four months.
Prerna Garg, an equity strategist at HSBC Global Research, attributed the outflows to elevated US bond yields and a stronger dollar, noting that looming geopolitical worries have also made investors more risk-averse.
She said this trend is particularly noticeable in India, where softer domestic growth, coupled with global macro factors, has deterred foreign investors.
Foreigners sold a net $9.04 billion worth of Indian stocks in January, their second-largest monthly net sales on record.
The US dollar index hit a 26-month high of 110.17 last month, driven by a robust labor market and fuelled concerns about the Federal Reserve's reluctance to cut rates this year. The US Treasury 10-year yields also touched a 14-month high of 4.809 per cent in January.
The US implemented additional 10 per cent tariffs on all Chinese imports this week, with Beijing retaliating by announcing levies on US imports including oil, coal, gas, cars, and farm equipment, set to kick in on February 10.
Meanwhile, foreigners sold Taiwan and South Korean stocks worth a net $1.52 billion and $1 billion, respectively, last month.
