According to Reuters, foreign investors have pulled out the largest sum of money from Asian stocks in approximately 15 years during the quarter ending in March. This trend was observed prior to the major tariff announcement made by U.S. President Donald Trump, leading some experts to predict further selling in the region as investors seek safer assets.

Data from LSEG revealed that overseas investors sold off stocks totaling $43.73 billion in countries such as India, Taiwan, South Korea, Thailand, Indonesia, Vietnam, and the Philippines during the quarter, marking the highest quarterly net sales since at least March 2010.

Trump's recent implementation of reciprocal tariffs on trading partners has fueled concerns about a global economic slowdown, particularly impacting regional growth. Ray Sharma-Ong, head of multi-asset investment solutions at Aberdeen Investments, noted that Asia is hit hardest by these tariffs, with countries like China, South Korea, and Taiwan facing significant rate hikes compared to lower rates for Latin America.

In March alone, foreign investors divested $17.51 billion worth of equities in the region, making it the largest net sales for a month since June 2022. Notably, Taiwan saw its highest monthly outflow of $14.13 billion in cross-border investments last month, the largest since at least January 2008. South Korean stocks also experienced sustained foreign selling for an eighth consecutive month, with a net sale of $1.46 billion.

Meanwhile, monthly foreign outflows from Indian equity markets decreased to a three-month low of $401 million in March. Additionally, foreign investors sold off Thai, Indonesian, and Vietnamese stocks worth $647 million, $491 million, and $426 million, respectively, last month.

Aberdeen's Ray Sharma-Ong mentioned that heavily affected regions like China, South Korea, and Taiwan are likely to witness further divestment as investors shift towards safer assets like U.S. Treasuries, the yen, and gold.