Foreign investors pull from Asian stocks as AI-driven tech rout spreads

Foreign outflows from Asian stocks rose sharply in the first week of February as South Korea and Taiwan came under pressure from a global selloff in high-growth technology shares on concerns over the hefty AI-related capital spending.

Foreign investors sold a net USD 9.79 billion worth of stocks in the week ended February 6, compared with roughly USD 3.9 billion net disposals in the whole of January, according to LSEG data for stock markets in South Korea, Taiwan, Thailand, India, Indonesia, Vietnam, and the Philippines.

The US Nasdaq Composite fell as much as 4.27% last week. Amazon slid about 12.11% on worries over a jump of more than 50% in its 2026 capital expenditures forecast, intensifying worries over AI-driven investment across the tech sector.

“This shift in sentiment weighed on Asia tech stocks as well,” Nomura said in a report.

Foreigners sold USD 7.48 billion worth of South Korean stocks in the week, compared with a monthly inflow of USD 446 million in January.

Taiwan stocks also suffered a net USD 3.43 billion foreign divestment in the most recent week after having received USD 306 million in foreign inflows last month.

“This past week’s moves in stocks reinforce, in our view, the message of maintaining some diversification and balance in portfolios, especially when positioning is crowded in some popular thematics,” the Nomura report said.

Cross-border investors, meanwhile, added a net USD 897 million worth of Indian stocks on optimism over a trade deal with the United States that cuts US tariffs on Indian goods to 18% from 50%.

Foreigners had sold USD 3.98 billion worth of Indian stocks in January, the most in five months.

“As such, it has to be assumed that the geopolitical cloud overhanging Indian equities, especially for foreign investors, has eased,” said William Bratton, the head of cash equity research, APAC at BNP Paribas.

“We see the near-term risk/reward balance (for India) as now firmly skewed to the upside,” BNP Paribas’ Bratton said.

Equities in Thailand, Indonesia, and the Philippines, meanwhile, attracted USD 332 million, USD 103 million, and USD 23 million, respectively, in foreign inflows last week.

Foreigners sold shares worth USD 236 million in Vietnam.

(Reporting by Gaurav Dogra in Bengaluru; Additional reporting by Patturaja Murugaboopathy; Editing by Janane Venkatraman)