Asian equities witnessed massive foreign outflows in August, as risk sentiment was dented by worries over the longevity of the U.S. Federal Reserve's policy tightening cycle and a slowdown in the economic momentum of China.
"Sudden jump in U.S. yields tend to be negative for Asian markets, especially for high duration markets, i.e. markets where a large part of their earnings is expected to come in future," said Prerna Garg, an equity strategist at HSBC. "A sharp slowdown in Chinese economic momentum and continuing turmoil in the property sector were local factors that contributed to foreign investors' negative sentiment ," said Manishi Raychaudhuri, Asia Pacific equities strategist at BNP Paribas.
"Among Asian and emerging market equity, India is perceived by foreign investors to be a relatively safe haven capable of providing uncorrelated returns," BNP Paribas' Raychaudhuri said.