Foreign Investors Pull $25.5 Billion from Asian Stocks in July — Here’s Why

Taiwan and South Korea Accounted for Virtually All Outflows

Taiwan and South Korea alone saw combined net selling of $29.21 billion in July — meaning that without their outflows, the rest of Asia would have been net positive .

Taiwan accounted for roughly 90% of the region's total net selling, with South Korea making up most of the remainder. Both markets are dominated by semiconductor bellwethers — TSMC, Samsung Electronics, and SK Hynix — that became the direct targets of the AI-spending pullback .

Which Asian Markets Attracted Inflows Instead

• India — The top beneficiary. Foreigners bought Indian equities, drawn by strong domestic earnings and a market less correlated to the AI chip cycle. India received about $2 billion in equity inflows in July and another ~$379 million on a single late-July day .
• Thailand — Attracted $1.46 billion in July, alongside India's inflows .
• Indonesia — Southeast Asian stocks broadly outperformed. Indonesia became one of the world's top-performing markets in July as funds rotated away from tech-heavy markets .
• Vietnam and the Philippines also saw modest net foreign buying, though volumes were smaller relative to the larger markets .

A Broader Shift: From AI Winners to Laggards

The July data is part of a larger pattern. Foreign investors had pulled a record $137 billion from Asian equities in the first half of 2026, the fastest six-month outflow in LSEG data going back to 2010 . The selling has been almost entirely concentrated in the two markets that benefited most from the AI boom: Taiwan and South Korea. Meanwhile, Southeast Asian equities have recorded their best monthly performance against broader Asian peers in 24 years, with Indonesia one of the world's top performers in July .

The divergence illustrates a market that is not indiscriminately fleeing Asia but is instead repricing risk after an extraordinary AI-driven rally — favoring markets with more diversified earnings and lower semiconductor exposure.