In March, Asian stocks experienced a surge in foreign investment, marking their strongest quarter for overseas inflows in more than three years. This was propelled by expectations of supportive monetary policies from major central banks and encouraging economic indicators from China.
Data from stock exchanges across several Asian countries revealed that foreign investors purchased a net total of $8.53 billion in regional equities last month. For the quarter, inflows reached $18.57 billion, the highest since December 2020.
The Swiss National Bank's unexpected rate cut and the Federal Reserve's commitment to maintaining a dovish stance with the prospect of three rate cuts in 2024 bolstered investor confidence.
China's robust factory output and exports during the January-February period signaled a resurgence in regional trade activity.
India attracted significant attention, drawing in approximately $4.24 billion in foreign capital, its highest influx in three months. However, its cumulative foreign inflows for the quarter stood at $1.3 billion, lower than the average of $3.08 billion recorded in the first quarters of the previous three election years.
Alicia Garcia Herrero, chief economist for the Asia Pacific at Natixis, noted India's increasing prominence in the MSCI global index, ranking second only to China, which is expected to persist, particularly as Narendra Modi is anticipated to secure victory in India's elections.
Foreign investors also injected substantial sums into South Korean, Taiwanese, and Indonesian stocks, amounting to $3.82 billion, $1.61 billion, and $505 million, respectively, last month.
Conversely, equity markets in Thailand, Vietnam, and the Philippines experienced outflows totaling $1.15 billion, $452 million, and $46 million, respectively.
Paraphrasing text from "Investing" all rights reserved by the original author.
