Foreign investors withdrew $137.36 billion from Asian equities in the first half of 2026, the largest six-month outflow since 2010.
Foreign investors pulled a net $137.36 billion from Asian stocks in the first half of 2026, marking the fastest six-month outflow since 2010. The sell-off was led by South Korea and Taiwan, which saw outflows of $70.8 billion and $29.6 billion, respectively, as funds rebalanced away from crowded AI chipmakers.
The KOSPI and Taiwan’s benchmark indices surged earlier in the year, driven by AI-related demand, but rebalancing pressures forced long-only funds to trim positions to maintain diversification limits. Analysts noted the outflows may not signal a broad risk-off shift, as proceeds could be hedged, repatriated, or redeployed outside Asia.
Regional markets reacted sharply, with South Korea’s KOSPI dropping 6% and Japan’s Nikkei falling over 2.5%. Southeast Asian markets, seen as undervalued but lacking near-term catalysts, may benefit from the shift down the supply chain.