Asian stock markets have seen massive investor outflows totaling approximately $11 billion due to geopolitical tensions from the ongoing U.S.-Iran crisis. This marks the largest weekly outflow for developing Asian equities excluding China since March 2022, driven by panic over oil supply disruptions critical to the region. Major indexes like the Nikkei, Kospi, and Sensex have led the sell-off, while some retail investors are reportedly buying the dips.
Geopolitical turmoil stemming from the U.S.-Iran war has triggered panic in Asian stock markets. Global investors sold approximately $11 billion in equities from developing Asia excluding China in a single week, representing the largest weekly outflow since March 2022.
Taiwan, South Korea, and India were hit hardest with outflows of roughly $7.9 billion, $1.6 billion, and $1.3 billion respectively. This selling pressure caused the MSCI Asia Pacific Index to drop 6.3% in one week, its biggest weekly loss in nearly six years.
The crisis centers on oil, as stated by The Kobeissi Letter, which notes Asia is the most dependent region on Middle Eastern energy. Approximately 90% of crude oil transiting the Strait of Hormuz is destined for Asia, with China alone receiving 38% of those flows.
Investor sentiment has sharply reversed after strong inflows in early 2026. Data shows that outside the 2022 bear market and 2020 pandemic sell-off, this week’s outflow is the largest on record.
In a contrasting trend, retail investor risk appetite remains high. According to further analysis, February was the fifth-strongest month on record for individual investor equity purchases. Retail investors have now purchased stocks for 26 consecutive months, with average daily retail options volumes in 2026 running 14% above 2025 levels.
