October 6 (Reuters) – Asian stocks have seen a large outflow of foreign capital since the start of the month amid concerns over China’s real estate sector and expectations that major central banks would soon raise interest rates due to concerns about rising inflationary pressures.
Foreigners sold a combined net total of $ 3.35 billion in Asian stocks this month to October 5, according to data from stock exchanges in India, South Korea, Thailand, Indonesia, Taiwan, Philippines and Vietnam.
Last month, cross-border investors bought Asian stocks with a net worth of $ 2.9 billion, the biggest influx in 2020, data shows.
“For Asia, the combination of growing uncertainty in China’s growth and a struggling Chinese mega developer has brought a lot of uncertainty to the market,” said Chang Wei Liang, Credit and Currency Strategist. at DBS Bank.
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The Taiwanese and South Korean stock markets faced an outflow of $ 2.13 billion and $ 762 million, respectively, this month.
Oil prices hit their highest level since November 2014 this month, raising fears that soaring energy costs will force central banks to raise rates faster to fight the acceleration of inflation.
Investors were also eagerly awaiting a key US payroll report later this week, which could strengthen the case for a reduction in stimulus by the Federal Reserve as early as next month.
Asian stocks saw massive outflows, when the Federal Reserve reduced its asset purchases in 2013, prompting investors to shy away from riskier assets.
“However, the current accounts of Asian economies are much healthier and foreign exchange reserves are much larger today than in 2013,” said Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas.
“Improving market access (via Stock Connect for example) and new IPOs (through the” homecoming “in Hong Kong / China and the listing of the digital space in India and in Indonesia) should support the interest of foreign investors in major Asian markets, ”he said. .
Last month, Indian stocks received net $ 1.8 billion in foreign exchange while Indonesian stocks took in $ 306 million.
Reporting by Gaurav Dogra, Anurag Maan and Patturaja Murugaboopathy in Bengaluru; Editing by Kim Coghill
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