Sept 4 Reuters Overseas investors aggressively withdrew from Asian tech stocks in August, as they turned pricey after their recent rally and doubts emerged about the profitability of AI investments.

According to LSEG data, foreigners sold a net 3.8 billion worth of regional shares in South Korea, India, Taiwan, Indonesia, Vietnam, Thailand, and the Philippines last month, after two months of net purchases in a row.

The month August has seen the outperforming tech sector trailing behind the rest in terms of performance, seemingly with some rotation in place towards the laggards as market participants digest lofty tech valuation and look towards upcoming Feds rate easing, Yeap Jun Rong, a market strategist at IG, said.

Taiwanese and South Korean equities, which include many companies that manufacture chips for AI applications, experienced outflows of 4.2 billion and 2.1 billion respectively in the last month.

Jason Lui, head of APAC equity and derivative strategy at BNP Paribas, attributed the foreign outflows in Taiwan and Korea to a reassessment of sentiment on semiconductors and AI.

Global investors are starting to question the profitability and sustainability of large capital spending by leading tech companies in the U.S., he said.

Indian markets managed a net inflow of 873 million. Most of the buying was driven by new issues in the primary market, however, and foreigners sold stocks traded on exchanges worth a net 662 million worth.

Foreigners have been…