Peter Smith
⬤ Asian equities took a serious hit last week as capital rushed out of regional markets. The MSCI Asia Pacific Index dropped 6.3%, its biggest weekly loss in nearly six years. According to data shared by The Kobeissi Letter, global investors offloaded $11 billion in developing Asian equities outside China, the largest weekly outflow since March 2022 and one of the biggest ever recorded outside the 2020 pandemic crash and the 2022 bear market.
⬤ Taiwan took the biggest hit. Foreign investors pulled a record $7.9 billion from Taiwanese equities in a single week, an all-time high for the market. South Korea followed with $1.6 billion in outflows, while India saw $1.3 billion leave. Bloomberg data shows Taiwan's foreign investment balance collapsing to historic lows, a stark sign of how quickly sentiment soured.
⬤ The selloff follows a strong start to 2026 for the region. During the first two months of the year, Asian markets attracted steady inflows as global funds built up emerging market exposure. That momentum has now unwound sharply. The same shift in risk appetite is playing out in other asset classes too, including commodities, as reflected in the recent WTI crude oil market pressure analysis, and in crypto, where the XRP price prediction outlook reflects similar caution.
⬤ A single-week $11 billion outflow concentrated in markets like Taiwan and South Korea can shift regional momentum fast. The scale of withdrawals signals that what began as a routine risk-off move has developed into a more deliberate repositioning by institutional investors. How quickly those flows reverse will depend on whether confidence in Asian growth prospects recovers in the weeks ahead.
Peter Smith
