Asian equities saw sharp outflows in August as worries over US President Donald Trump’s tariffs weighed on the outlook for the region’s exporters, while a weaker dollar added to margin pressures and competitiveness concerns.
Foreigners sold a net $8.8 billion of equities across India, Taiwan, South Korea, Thailand, Indonesia, Vietnam and the Philippines last month, according to data compiled by LSEG, ending a three-month buying streak.
Trump last month imposed tariffs of 10 percent to 50 percent on importing goods from major trading partners, including 50 percent on India, 20 percent on Taiwan, 19 percent on Thailand and 15 percent on South Korea.
While Asian exporters had passed most of the tariff costs to the US, margin compression is likely in the months ahead as reciprocal tariffs rise further, Nomura said in a report.
Indian equities led the regional outflows as foreigners ditched local shares worth approximately $4 billion, the most for a month since January.
Some analysts expect India’s consumption-focused tax rate cuts this month in response to US tariffs would help revive demand for Indian equities.
Foreign investors sold Taiwanese stocks worth $2.05 billion, $1.63 billion of Vietnamese shares, $1.06 billion of South Korean equities and $709 million of Thai stocks last month. Indonesian equities, however, bucked the trend with $676 million of net foreign inflows.
