June 6 (Reuters) - Asian equities attracted strong

foreign inflows in May as concerns over an immediate economic

hit from higher U.S. tariffs eased, prompting a return by

investors who had previously exited large and concentrated

positions in the region.

The inflows marked a sharp reversal after four consecutive

months of net foreign selling.

According to data from LSEG, foreign investors bought

approximately $10.65 billion worth of equities across India,

Taiwan, South Korea, Thailand, Indonesia, Vietnam, and the

Philippines, registering their largest monthly net purchase

since February 2024.

U.S. President Donald Trump's announcement of reciprocal

tariffs in early April stoked concerns over the impact on Asian

exports, exporter margins, and regional supply chains, but a

subsequent 90-day pause for most countries later in the month

helped ease investor fears and revive interest in regional

assets.

Goldman Sachs said it has revised its earnings growth

forecast for MSCI Asia Pacific ex-Japan (MXAPJ) to 9% for both

2025 and 2026, raising estimates by 2 and 1 percentage points,

respectively, citing stronger macro growth in China and

U.S.-exposed markets.

The upgrade was also supported by $600 billion in AI-related

investments from Saudi Arabia to U.S. firms, which are expected

to benefit Taiwan and Korea, though the impact may be partially

offset by a weaker dollar, the brokerage said.

Taiwan equities witnessed $7.28 billion worth of foreign

inflows, the largest monthly cross-border net purchase since

November 2023.

Foreigners also acquired a significant $2.34 billion worth

of Indian stocks in their largest monthly net purchase since

September 2024.

South Korean, Indonesian and Philippine stocks also saw

foreign inflows worth a net $885 million, $338 million and $290

million, respectively, while Thai stocks suffered $491 million

of net selling.

Despite heightened market volatility in the first half of

the year driven by concerns over President Trump's trade

policies, the MSCI Asia-Pacific Index has risen

about 8.8% year-to-date, outperforming both the MSCI World Index

, which is up 5.4%, and the S&P 500 Index,

which has gained 0.98%.