You are here: Home » Markets » News
Business Standard

Foreign funds cash out of key Asian emerging markets ahead of Fed meeting

Overseas funds have sold a net $3.1 billion worth of shares in Taiwan, South Korea and India so far this week

Topics
Emerging markets | US Federal Reserve

Shikhar Balwani | Bloomberg 

stock markets

Foreigners are cutting and running in some key Asian amid turbulent trading ahead of this week’s Federal Reserve meeting, where policymakers are expected to signal an interest-rate liftoff in March.

Overseas funds have sold a net $3.1 billion worth of shares in Taiwan, South Korea and India so far this week, according to the latest available data compiled by Bloomberg. That follows $4.9 billion of withdrawals last week, the largest since August.

The MSCI Asia Pacific Index has lost more than 5% in two weeks, as rising bets on faster-than-expected monetary tightening and heightened tensions over Ukraine roiled global stock . Benchmarks in Taiwan and Korea have suffered with their large tech exposure, with the sector bearing the brunt of the selloff as bond yields rose.

“Coupled with the rise in geopolitical risks (Russia – Ukraine) that may keep energy costs high in the near term, risks are fairly high for now and it’s not surprising to see money being taken off the table,” said Lorraine Tan, director of Asia equity research at Morningstar.

chart

Some Southeast Asian that have relatively low exposure to tech names have bucked the trend of outflows. Foreigners have been net buyers in small amounts in Indonesia, Malaysia, Thailand and Vietnam so far this week.

Asean Bulls Aided by Value Bias in Global Rotation: Taking Stock

In India, where the benchmark stock gauge slumped the most in two months on Monday, consumer technology names were among the biggest losers.

“The high intensity of selling in the market appears like forced liquidation by large foreign investors,” Abhay Agarwal, fund manager at Mumbai-based Piper Serica Advisors Pvt., said on the day.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, January 26 2022. 12:38 IST
RECOMMENDED FOR YOU