Asian shares see heavy outflows for second straight month in November

By Gaurav Dogra

(Reuters) – Asian shares had been underneath promoting strain from international traders for a second consecutive month in November amid worries over potential U.S. tariff hikes on regional exports underneath the incoming Donald Trump administration subsequent yr.

Foreigners internet withdrew $15.88 billion out of fairness markets in Taiwan, South Korea, India, Thailand, Indonesia, Vietnam and the Philippines, following a internet $15.38 billion value of gross sales within the prior month, LSEG knowledge confirmed. It was their largest month-to-month internet promoting since June 2022.

“What we’ve seen in November is a response to Trump 2.0, the place there are considerations that U.S. President-elect Donald Trump’s protectionist stance may imply a follow-through of his tariff threats, which can negatively influence Asian export-driven economies,” stated Yeap Jun Rong, market strategist at IG.

Final month, Trump pledged to impose vital tariffs on the USA’ three largest buying and selling companions, together with China, a transfer that would influence regional exports closely reliant on sturdy provide chains with China.

Chetan Seth, an analyst at Nomura, highlighted a bleak outlook for Asian shares into 2025, attributing the pessimism to components together with impending tariffs, commerce tensions, a probably stronger USD, rising bond yields and fewer supportive financial insurance policies, compounded by China’s delay in implementing anticipated stimulus measures.

Taiwanese shares witnessed internet international outflows of $8.41 billion in November, the largest since April 2022. South Korean shares additionally misplaced a hefty $3.21 billion, marking a fourth successive month of capital outflows.

A surge within the greenback after Trump’s victory within the Nov. 5 election additionally dampened investor sentiment, because the greenback index reached 108.09, its highest degree since Nov. 11, 2022.

Overseas traders internet offered Indian shares value $2.56 billion after about $11.2 billion value of internet promoting in October.

Indonesian, Vietnam and Thai shares additionally noticed international outflows value $1.06 billion, $461 million and $395 million, respectively.

“Trying forward, threat stays with the tail situations the place commerce disruptions spill over extra broadly,” stated Minyue Liu, a senior funding specialist at BNP Paribas (OTC:BNPQY) Asset Administration.

“Nevertheless, optimistic components similar to US Fed’s and ECB’s price lower, earnings restoration and resilient efficiency throughout EM belongings, plus affordable valuation, ought to assist to draw some international flows into the Asia ex-Japan and the broader Rising Market universe.”