Asia stocks climb tracking Wall St rally; Nikkei hits record high, China GDP beats
By Gaurav Dogra
March 5 (Reuters) - Foreigners sold Asian equities for a fourth straight month in February, as they booked profits and sharply cut exposure to South Korea amid concerns over stretched technology sector valuations and rising geopolitical risks.
South Korea saw record foreign outflows of $13.67 billion last month, erasing about $5.36 billion from regional equities, per LSEG data covering exchanges in South Korea, Taiwan, Thailand, India, Indonesia, Vietnam and the Philippines.
The U.S. Nasdaq Composite fell 3.4% last month, as investors turned cautious over lofty valuations and risks tied to major technology firms’ artificial intelligence spending plans.
"AI-related valuation jitters were not confined to the U.S. but reverberated globally, contributing to a broader reduction in risk appetite," said Dat Tong, a Senior Financial Markets Strategist at Exness.
South Korea’s benchmark KOSPI slid roughly 10.9% so far this month, as investors unwound crowded chipmaker positions on worries that a widening Middle East war could trigger an oil shock that raises inflation and delays interest rate cuts.
"We still see near-term upside on the memory super-cycle, but the non-tech sectors (in South Korea) are now expensive," William Bratton, the head of cash equity research, APAC at BNP Paribas, said.
Vietnam also saw strong foreign outflows last month, losing $301 million, the most in a month since October 2025.
In contrast, Taiwanese, Indian, Thai, Indonesian and Philippine stocks attracted foreign inflows of $4.04 billion, $2.5 billion, $1.75 billion, $192 million and $144 million, respectively, in February.
"Asian markets may remain under pressure as investors closely monitor developments in the Middle East," Exness’ Tong said.
"A sustained rebound in the U.S. dollar and U.S. Treasury yields could tighten global financial conditions and likely exert additional outflow pressure."