SINGAPORE, August 11, 2026, 17:05 SGT
- In July, foreign investors recorded net sales of Asian equities totaling $25.48 billion.
- Together, Taiwan and South Korea saw total outflows reach $29.21 billion.
- India and Thailand attracted $3.58 billion, indicating the withdrawal was focused.
- July was the ninth month in a row that the region recorded net foreign outflows.
In July, overseas investors pulled $25.48 billion from Asian equities. Taiwan accounted for $22.95 billion of the outflows, with South Korea shedding an additional $6.26 billion.
The concentration carries greater significance than the headline figure. Taiwan and South Korea accounted for 114.6% of net outflows in the region. Inflows to other markets partially countered their combined $29.21 billion withdrawal.
This was a shift in technology strategy, rather than a wholesale pullback from Asia. India and Thailand attracted the majority of the capital reallocations.
| Asian equity market | July foreign flow | Direction |
|---|---|---|
| Taiwan | -$22.95 billion | Outflow |
| South Korea | -$6.26 billion | Outflow |
| Vietnam | -$12 million | Outflow |
| India | +$2.12 billion | Inflow |
| Thailand | +$1.46 billion | Inflow |
| Indonesia | +$88 million | Inflow |
| Philippines | +$69 million | Inflow |
| Seven-market total | -$25.48 billion | Outflow |
Country flows are sourced from LSEG, covering seven Asian markets. Minor discrepancies between the sum of country totals and the overall regional figure are due to rounding.
Taiwan reported a steep increase in outflows, with July totals 2.87 times June’s approximately $8 billion. South Korea saw foreign investors sell for a third consecutive month.
| Flow concentration measure | Result |
|---|---|
| Regional net outflow percentage from Taiwan | 90.1% |
| Net outflow from Taiwan and South Korea | $29.21 billion |
| Combined share of regional net outflows | 114.6% |
| Net inflow to India, Thailand, Indonesia and Philippines | $3.737 billion |
| Offset from the four markets to Taiwan and Korea sales | 12.8% |
| Taiwan’s July outflow compared with June | 2.87 times |
The concentration ratios, based on LSEG country data, reveal that while inflows diminished the technology-market downturn, they did not fully offset it.
Chip demand, spending, and balance-sheet risks weighed on investors’ minds. Negative cash flows from Alphabet Inc. NASDAQ:GOOGL and Tesla Inc. NASDAQ:TSLA increased pressure across the broader AI sector.
According to BNP Paribas analysts, investors are now expressing doubts about chip-demand predictions and the ability to repay debt. The analysts added that the availability of less expensive AI models from China has contributed to declining sentiment.
Capital shifted direction instead of vanishing. “The unusually high swings in AI-related sectors are making global investors diversify,” said Herald van der Linde, head of Asia-Pacific equity strategy at HSBC. He noted that India appeared better positioned. Reuters
| Market or region | Strategist positioning | Flow evidence |
|---|---|---|
| India | HSBC raises view to neutral for Asia | +$2.12 billion |
| Taiwan | Concerns over AI demand and balance sheets | -$22.95 billion |
| South Korea | Concerns over AI demand and balance sheets | -$6.26 billion |
| Asia seven-market sample | Nine consecutive months of net outflows | -$25.48 billion |
HSBC’s relative assessment of India is integrated with July’s LSEG flow data in the positioning table. “We recently upgraded India to neutral within Asia,” van der Linde said. Reuters
Foreign capital holds significant influence in both tech-focused exchanges. In the first half of 2025, foreign institutions accounted for 37% of trading activity on the Taiwan exchange. According to Korea Exchange, overseas investors typically own between 30% and 40% of the market’s capitalisation.
The structural figures presented are not forecasts for July. They illustrate how rapid offshore repositioning can intensify index fluctuations and affect currency hedging.
Risks move in both directions. Improved chip demand or higher AI-related cash flow could swiftly turn the trend. Conversely, a softer earnings cycle would intensify overseas selling in Korea and Taiwan.
Taiwan and South Korea were already closed at the time of writing. Indian markets remained open, and U.S. cash markets had yet to begin trading.
The upcoming decision hinges on evidence rather than just valuation. Improvements in chip-demand outlook and U.S. AI cash flow are needed before July’s $29.21 billion exit appears short-lived.
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