(Aug 11): Foreign investors sold Asian equities on a net basis for a ninth consecutive month in July, with heavy ​selling in Taiwan and South Korea as concerns over ‌AI spending and chip demand weighed on the region's technology-heavy markets.

Regional tech exporters came under pressure last month after Alphabet and Tesla ​reported negative cash flows, raising worries over the durability of ​growth and mounting cash burn.

"AI heavyweights in South Korea and ⁠Taiwan faced massive selloffs as investors started to question ​their chip-demand forecasts and debt-repayment ability," BNP Paribas analysts said ​in a July note, adding that China's Moonshot announcement about its low-cost AI models "aggravated negative market sentiment."

Foreign investors sold a net US$25.48 billion (RM104.26 billion) worth ​of stocks across South Korea, Taiwan, India, Indonesia, Thailand, Vietnam ​and the Philippines last month, according to LSEG data.

Taiwan accounted for US$22.95 billion ‌of ⁠the outflows, following June's roughly US$8 billion in outflows, and South Korea another US$6.26 billion, marking a third consecutive month of outflows.

Vietnamese stocks also recorded marginal foreign outflows of US$12 million last month.

Meanwhile, ​equities in ​India, Thailand, Indonesia ⁠and the Philippines logged foreign inflows of US$2.12 billion, US$1.46 billion, US$88 million and US$69 million, respectively, partly offsetting ​the withdrawals.

"The unusually high swings in AI-related ​sectors are ⁠making global investors diversify, and on that measure we think India looks better placed," said Herald van der Linde, head ⁠of equity ​strategy for Asia Pacific at HSBC, ​in a note last week.

"We recently upgraded India to neutral within Asia," van ​der Linde wrote.

Uploaded by Siow Chen Ming