Published by Global Banking & Finance Review®
Posted on March 24, 2026
3 min readLast updated: March 24, 2026
Add as preferred source on GoogleForeign investors pulled a record ~$50.5 b from Asian equities in March, driven by Middle East tensions that caused a sharp oil surge, reigniting stagflation fears.
By Gaurav Dogra
March 24 (Reuters) - Asian stocks have seen heavy foreign outflows so far in March as disruptions to Middle East energy supply from the U.S.-Israeli war with Iran stoked fears of an oil shock and stagflation risks.
Foreign investors have sold a net $50.45 billion worth of regional equities so far this month, on track for the largest monthly outflows since at least 2008, LSEG data covering exchanges in South Korea, Taiwan, Thailand, India, Indonesia, Vietnam and the Philippines showed.
"Outflows from EM Asia markets were driven by the broad-based risk-off sentiment due to the Middle East conflicts, as most of EM Asia economies are net importers of energy products," said Jason Lui, the head of APAC equity and derivative strategy at BNP Paribas.
Benchmark Brent crude oil prices surged as much as 65% this month to $119.5 a barrel.
Abdelaziz Albogdady, a market research and fintech strategy manager at brokerage FXEM, said that the outflows were exacerbated by the ensuing rise in global yields and a reassessment of rate expectations, in addition to the potential economic impact on net oil importers.
Recent policy signals from major central banks indicate that interest rates are likely to remain on hold or move higher if the conflict continues to heap pressure on prices.
Taiwanese stocks have seen about $25.28 billion in outflows month-to-date, the largest in at least 18 years, while South Korea and India have recorded about $13.5 billion and $10.17 billion in net foreign sales, respectively.
"Outflows in Taiwan and South Korea were mostly focused on AI/technology stocks given they have accumulated sizable gains during the AI boom," BNP Paribas' Lui said.
Tech hardware stocks in Korea and China, however, remain among the most promising segments, seeing limited immediate direct impact from the Middle East conflict or higher energy prices, analysts at Nomura said in a note on Monday.
Thailand, the Philippines and Vietnam also recorded net outflows of $1.35 billion, $182 million and $21 million, respectively, while Indonesia attracted net inflows of $59 million over the same period.
Lui said EM Asia markets are likely to remain volatile in the near-term amid contradictory headlines and elevated geopolitical risks.
"Unlike the Liberation Day scenario during which the U.S. can unilaterally decide on the tariff threshold, the current energy shock may take longer to normalize given the disruption to the production facilities in the Middle East."
(Reporting by Gaurav Dogra; with additional reporting by Patturaja Murugaboopathy and Editing by Ronojoy Mazumdar)
Asian stocks are seeing heavy foreign outflows due to fears of oil shocks and stagflation risks stemming from Middle East conflicts, especially the U.S.-Israeli war with Iran.
Foreign investors have sold a net $50.45 billion worth of Asian equities in March, the largest monthly outflows since at least 2008.
Taiwan, South Korea, and India have seen the largest outflows: $25.28 billion, $13.5 billion, and $10.17 billion respectively.
Benchmark Brent crude oil prices surged up to 65% this month, reaching $119.5 a barrel due to concerns over energy supply disruptions.
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