Anika Begay
Vscek — Emerging markets in Asia saw strong overseas selling last week, Goldman Sachs analysts said in a note, with mainland China markets seeing the bulk of the outflows on lingering concerns about the country.
EM Asia saw total outflows of $6.5 billion, led by a $2.1 billion outflow in China’s A-share market and $2 billion in Taiwan. South Korea and India also saw outflows of over $1 billion each.
The outflows came as risk-driven markets were hit by a series of negative signals, including growing concerns about a U.S. recession and hawkish signals from the Bank of Japan. While most regional markets have recovered much of these losses, China has lagged its peers.
Chinese indices hovered near six-month lows, seeing little bargain buying, as a series of weak economic data in July undermined confidence in the country.
Even the country’s major political meetings have provided few details about increased policy support for the economy.
However, despite the sustained outflows from China A shares, the south-facing Chinese market, particularly Hong Kong, saw inflows of $2 billion last week.
Hong Kong stocks have fared relatively better than their Chinese counterparts, recovering from near four-month lows last week, largely thanks to bargain-basement buying in internet heavyweights such as Tencent Holdings (HK:) and Alibaba Group (NYSE:).
Both companies will report their June quarter earnings this week.
