Emerging markets lose $33.8 billion in October as investors flee Asian stocks

ETMarkets.com Emerging market outflows Synopsis October witnessed an alarming withdrawal of $33.8 billion by foreign investors from emerging markets, the largest since March.

Almost all of this outflow consisted of equities, severely impacting Taiwan.

While Emerging Asia grappled with major losses, Latin America encountered minimal setbacks amid election related volatility.

Additionally, Chinese stocks continued to see foreign sell offs for the fifth consecutive month.

By ETMarkets.com Last Updated: Nov 06, 2026, 12:24:00 AM IST Follow us Foreign investors pulled a net $33.8 billion out of emerging markets in October, marking the biggest monthly outflow since March, as concerns over technology stocks and country specific risks prompted investors to cut exposure to the asset class, Reuters reported, citing data from the Institute of International Finance (IIF).

However, easing US bond yields and a weaker dollar following the US midterm elections could provide some relief to emerging economies.ADVERTISEMENT The latest outflow was significantly higher than the revised $19.3 billion withdrawn in September.

Emerging markets had attracted $27.4 billion in October last year, according to IIF data cited by Reuters.

For live updates on US Markets, click here Equities accounted for almost the entire outflow, with investors withdrawing a net $31.7 billion.

Debt markets recorded outflows of $2.1 billion, as fresh investments in bonds outside China partly offset withdrawals from Chinese debt.

Taiwan and South Korea bear the brunt of equity selloff Emerging Asia accounted for $28.7 billion of October's total outflows, with Taiwan and South Korea among the worst hit markets as investors booked profits following strong gains earlier in the year.Foreign investors pulled $31.8 billion from Taiwanese stocks, the largest monthly withdrawal in IIF data dating back to 2000.

South Korean equities saw outflows of $14.6 billion, Reuters reported.

Taiwan's benchmark index had gained 66% in the first nine months of 2026, while South Korea's rose 62%.ADVERTISEMENT ADVERTISEMENT China also continued to face foreign investor withdrawals, with equities recording $5 billion in outflows for the fifth consecutive month.

Chinese debt saw withdrawals of $9.3 billion, its biggest since May, according to the IIF.US midterm results could ease pressure Despite the October selloff, the IIF sees potential support for emerging markets from a softer US dollar and lower Treasury yields.

The US midterm election results have strengthened expectations of easing financial conditions, which could reduce borrowing costs and currency pressures for developing economies.ADVERTISEMENT "The (October) outflows came alongside lower US yields and a broadly stable dollar, which we read as a sign that equity risk appetite and country specific shocks were the main sources of pressure over the month," IIF senior economist Jonathan Fortun wrote in a report.However, concerns around the profitability of artificial intelligence investments and expectations of a Federal Reserve rate hike next month could keep Asian technology stocks under pressure, the IIF said.Emerging market equity outflows have reached $127.4 billion so far in 2026, compared with $18.5 billion a year earlier.

Total net inflows into emerging markets stand at $135.9 billion, against $254 billion in 2025, Reuters reported, citing IIF data.