Asian investors are making a major portfolio shift, reducing exposure to artificial intelligence stocks that have risen rapidly and are becoming highly volatile. Money is flowing into lower-risk sectors such as bank stocks, consumer goods, Chinese internet companies, and equities in Indonesia, China, and India. Fidelity International, BNP Paribas Asset Management, and Citigroup have all cut their weightings in South Korean and semiconductor stocks while increasing investments in Chinese equities. South Korea's stock market has fallen more than 21 percent this month, and Taiwan stocks are down more than 5 percent, while the MSCI ASEAN Index has gained 5.8 percent this month. This contrasts with the MSCI Asia Pacific Index, which has dropped nearly 4 percent, putting the ASEAN region on track to outperform the broader Asian market by the widest margin in over 20 years. Thai stocks have risen about 30 percent this year on expectations of political stability. However, some investors view this rotation as possibly a short-term portfolio adjustment, as they remain positive on the long-term growth of AI. Key factors the market will watch next include earnings from major US tech companies such as Alphabet, Microsoft, Meta, and Apple, as well as their future AI investment spending plans.
Citigroup Inc.
Meta Platforms Inc.
