Foreigners are cutting and running in some key Asian emerging markets amid turbulent trading ahead of this week’s US Federal Reserve meeting, where policymakers are expected to signal an interest-rate lift-off in March.
Overseas funds have sold a net $3.1 billion worth of shares in Taiwan, South Korea, and India so far this week, according to the latest available data compiled by Bloomberg. That follows $4.9 billion of withdrawals last week — the largest since August.
“Coupled with the rise in geopolitical risks (Russia–Ukraine) that may keep energy costs high in the near term, risks are fairly high for now and it’s not surprising to see money being taken off the table,” said Lorraine Tan, director of Asia equity research at Morningstar.
The MSCI Asia Pacific Index has lost more than 5 per cent in two weeks, as rising bets on faster-than-expected monetary tightening and heightened tensions over Ukraine roiled global
Benchmarks in Taiwan and Korea have suffered with their large technology (tech) exposure, with the sector bearing the brunt of the sell-off as bond yields rose. “Foreign investors seem to have started reducing risky assets as they gauge the Fed’s monetary tightening,” said Hyun Choi, head of equity at Baring Asset Management Korea.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU