Foreign Investment Outflow and the AI Capital Rotation

The whole thing is churning, you know? Foreign investors are moving around because of all this AI stuff. It’s caused a massive outflow from India in 2026. Seriously.
Over fifty percent of what they were putting into India-focused equity funds since 2023 has just left now. That's the story, according to Elara Securities and that Global Liquidity Tracker they put out, which Moneycontrol cited.
They found something interesting too. Out of all the money flowing in between March 2023 and October 2024 that’s about fifty-five percent of those inflows has been redeemed already. And who was doing the redeeming? Mostly funds based in Luxembourg and Japan.
Where is that money going now? A lot of it is heading into places where the AI opportunities feel bigger. Think US, Taiwan, South Korea. That's where the real movement is happening for foreign capital right now.
The US equities, for example. They attracted an absolutely massive $120 billion in just the last week alone. And that was mostly exchange-traded funds. It’s clear.
Elara Securities pointed out that India still acts as a funding source for this whole global rotation. It's still playing a role.
But the focus is shifting elsewhere. South Korea, Taiwan, Japan those markets have seen huge inflows year-to-date in 2026. Kospi in South Korea just had a record rally, surging over two hundred and four percent. That was pushed by two names: Samsung and SK Hynix. Just those two stocks driving the whole thing in the AI boom.
Taiwan’s Taiex jumped sixty-two percent. Japan's Nikkei 225 followed suit with a forty percent climb. Record levels, really.
The US tech side kept momentum too. That Nasdaq index is up fourteen percent so far this year. It’s moving fast.
And emerging markets? Elara suggested that those global emerging market funds are increasingly acting like a proxy for the AI value chain trade. South Korea and Taiwan now make up about fifty-two percent of that benchmark emerging market index, which is telling.
Meanwhile, Chinese and Indian markets? They've been under serious pressure because they just don’t have those big AI stocks. It’s been tough there. Both countries saw record outflows in the last couple of weeks. $440 million from China. And $1.7 billion from India. Just draining out.
And then there's the other side of things, money pulling out of safer assets. Investors kept dragging funds out of precious metals. Outflows from that category hit a twelve-week high. Three billion dollars gone in just that time frame. Cumulative withdrawals since March? Eighteen billion dollars total. That’s staggering.
Written by Gree News Team — Senior Editorial Board
Gree News Team covers international news and global affairs at Gree News. Our collective of senior editors is dedicated to providing independent, accurate, and responsible journalism for a global audience.
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