Asian stock markets experienced their largest monthly foreign outflows in almost six years during November. The decline was driven mainly by a sharp selloff in major technology stocks, as concerns over stretched valuations pushed investors to reduce risk.
Foreign investors sold a net $22.1 billion in shares across Taiwan, South Korea, India, Thailand, Indonesia, Vietnam and the Philippines. This marks the heaviest monthly withdrawal since March 2020, when outflows reached $33.32 billion, according to LSEG data.
Taiwan led the regional downturn with $12.04 billion in net foreign selling. South Korea followed with $9.75 billion, its biggest monthly outflow since early 2020.
Herald van der Linde, head of equity strategy for Asia Pacific at HSBC, said the selling reflected growing unease about the sustainability of the artificial intelligence rally. He noted that markets have become heavily concentrated in a few AI-related trades, making valuations very sensitive to even small shifts in expectations.
India, Thailand and Vietnam also recorded notable withdrawals of $425 million, $388 million and $286 million, respectively.
However, not every market saw an exodus. Indonesian equities recorded $731 million in inflows, while the Philippines gained $59 million, bucking the regional trend.
Investor sentiment has improved somewhat in December. Taiwan and South Korea attracted $2.58 billion and $1.84 billion in foreign inflows by Wednesday’s close.
Analysts at Goldman Sachs expect strong hyperscaler spending on AI infrastructure through 2026–27 to keep chip supply tight. This trend is likely to support earnings for Asian semiconductor companies and stabilize valuations even if an AI bubble eventually forms.
The MSCI Asia-Pacific Index has risen 23.13% this year and is on track for its strongest annual performance in eight years.
“Asia equities performed resiliently in 2025, supported by policy measures, strong domestic demand, and ongoing AI-driven innovation,” said Mike Shiao, chief investment officer for Asia ex-Japan at Invesco.
He added that a weakening U.S. dollar, a trend that has historically supported Asian assets, could further benefit the region’s equity markets.
