Foreign investors withdraw a record $137bn from Asian equities amid AI-driven rebalancing and regional market declines.
Asia-Pacific equities fell sharply as a tech sector sell-off dragged South Korea’s Kospi down 6% and Japan’s Nikkei over 2.5%. The declines followed a record $137bn outflow from Asian stocks by foreign investors, driven by AI rally-induced portfolio rebalancing and rising regional risks.
Prior sessions had seen mixed performance, with the Kospi and Nikkei posting modest gains before today’s reversal. Analysts cited diverging AI hardware stock valuations and chip sector outflows as key pressure points, while Korea’s inflation hit a 2.5-year high, adding to macroeconomic concerns.
The People’s Bank of China set the USD/CNY reference rate at 6.8088, weaker than the 6.7929 estimate, signaling potential currency stabilization efforts amid broader market volatility.