Foreign investors return to Asian equities in May, reversing prolonged outflows

Reuters

Tue, May 13, 2025, 1:45 AM 2 min read

(Reuters) -Asian equities are attracting overseas investments truthful acold successful May, marking a crisp reversal from outflows successful the archetypal 4 months of the year, arsenic optimism implicit advancement successful commercialized talks has eased fears of U.S. tariffs fuelling a planetary economical slowdown.

Foreign investors person purchased astir $6.22 cardinal worthy of equities crossed India, Taiwan, South Korea, Thailand, Indonesia, Vietnam, and the Philippines truthful acold this period done May 12, according to LSEG data.

Leading the rebound, Taiwan has attracted a nett $4.43 cardinal successful overseas inflows, ending a four-month streak of outflows, portion Indian equities person besides seen a important $1.68 cardinal successful overseas investment.

Regional banal markets suffered astir $54.33 cardinal successful overseas outflows during the archetypal 4 months of the year, the largest exodus for the play since astatine slightest 2010.

After a turbulent commencement to the twelvemonth owed to interest astir U.S. President Donald Trump's commercialized policies, Asian equities person staged a beardown recovery. The MSCI Asia-Pacific Index has surged 18% since April 7, driven by a 90-day halt connected higher U.S. tariffs and advancement successful commercialized negotiations.

The U.S. and China agreed to temporarily trim steep reciprocal tariffs and cooperate to forestall further disruption to the planetary economy, with the U.S. lowering levies connected Chinese imports to 30% from 145% and China cutting duties to 10% from 125% for 90 days.

However, immoderate analysts caution that uncertainty persists, arsenic commercialized negotiations are expected to beryllium prolonged and it remains excessively aboriginal to find whether the tariff reductions volition beryllium permanent.

"News travel astir commercialized deals has increased, accent measures person moderated from caller extremes, the dollar has weakened, and portfolio flows amusement tentative signs of re-risking," Goldman Sachs said successful a note.

But it noted that the operation of subdued institution net maturation and complacent valuations indicates a imaginable for near-term marketplace pullbacks.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy successful Bengaluru; Editing by Emelia Sithole-Matarise)