(Bloomberg) -- Foreign investors are returning to emerging Asian equities after several weeks of outflows, as China reopens from Covid lockdowns and the dollar pulls back from a year-long rally.
Weekly inflows for Asian stock markets excluding Japan and China climbed to almost $2.7 billion last week, the most since February, according to data compiled by Bloomberg. Taiwan and South Korea saw the biggest inflows at around $1 billion each, paring combined outflows for the two tech-heavy markets for the year to under $40 billion.
Tech-Heavy Stock Markets See $63 Billion of Outflows in Asia
“China's easing of restrictions has removed the clouds of uncertainty for the region, creating room for a further pickup in manufacturing activity,” Charu Chanana, a market strategist at Saxo Capital Markets, wrote in an email.
The reopening of China's economy has sparked a swift turnaround in sentiment toward Asia, as activity returns to major cities like Shanghai and Beijing. Some market participants also expect the dollar to peak in the short term after a slew of mixed US data -- which has been traditionally supportive of emerging-market stocks and currencies.
Whether the flows can continue will depend on a sustainable reopening in China and the Federal Reserve slowing down its plans for rate hikes, wrote Chetan Seth, a strategist at Nomura in an email.
“None of these scenarios are a given – at least where we stand currently,” he said.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
