Foreigners sell Asian equities in December on worries over valuations

[BENGALURU] Foreign investors net sold Asian equities in December, on lingering concerns about elevated valuations in technology stocks along with some year-end profit-taking, though the relatively modest outflows compared to November suggested some recovery in sentiment.

The investors sold local stocks worth a net US$1.2 billion in India, Taiwan, South Korea, Thailand, Indonesia, Vietnam and the Philippines last month, sharply down from US$22.1 billion of net selling in November, London Stock Exchange Group data showed.

In December, foreigners divested a net US$1.9 billion in Taiwan stocks, for a third straight monthly net sale.

Herald van der Linde, head of equity strategy for Asia-Pacific at HSBC, said: “After a strong rally in artificial intelligence stocks, especially in (South) Korea and Taiwan where markets are now crowded and valuations (are) stretched, it may be wise for investors to diversify.”

Indian stocks registered a net US$2.5 billion cross-border outflow, the largest in three months as consumption softened, while investors remained concerned over a lack of progress in striking a US-India trade deal.

Philippine stocks faced a net US$210 million worth of foreign outflows last month.

Meanwhile, foreigners snapped up US$2.4 billion, US$732 million, US$196 million and US$63 million of South Korean, Indonesian, Thai and Vietnamese stocks, respectively, last month.

Jason Lui, the head of Apac equity and derivative strategy at BNP Paribas, said that the investors added more South Korean equities due to the sharp rise in memory and storage pricing, as the South Korean tech companies have a dominant market share in these products.

Including foreign selling in December, regional equities had net outflows of US$49.4 billion in 2025, the largest since about US$58.6 billion in 2022, as uncertainty over the US tariffs on countries in the region weighed on investor sentiment. REUTERS