Feb 6 (Reuters) - Foreign investors pulled heavily out

of Asian stocks in January, deterred by higher U.S. Treasury

yields and rising concerns that regional exports could suffer

under additional tariffs from President Donald Trump's

administration.

Foreigners divested stocks worth $12.5 billion, on a net

basis, in India, Taiwan, South Korea, Thailand, Indonesia,

Vietnam and the Philippines in January, their third monthly net

sales in four months.

Prerna Garg, an equity strategist at HSBC Global Research,

attributed the outflows to elevated U.S. bond yields and a

stronger dollar, noting that looming geopolitical worries have

also made investors more risk-averse.

She said this trend is particularly noticeable in India,

where softer domestic growth, coupled with global macro factors,

has deterred foreign investors.

Foreigners sold a net $9.04 billion worth of Indian stocks

in January, their second-largest monthly net sales on record.

The U.S. dollar index hit a 26-month high of 110.17 last

month, driven by a robust labor market and fuelled concerns

about the Federal Reserve's reluctance to cut rates this year.

The U.S. Treasury 10-year yields also touched a 14-month high of

4.809% in January.

The U.S. implemented additional 10% tariffs on all Chinese

imports this week, with Beijing retaliating by announcing levies

on U.S. imports including oil, coal, gas, cars, and farm

equipment, set to kick in on February 10.

Meanwhile, foreigners sold Taiwan and South Korean stocks

worth a net $1.52 billion and $1 billion, respectively, last

month.

"The outflows in Taiwan and Korea equities are mainly due to

the popularity of DeepSeek as investors are re-assessing the

growth trajectory of AI capex in light of low-cost open-sourced

AI models," said Jason Lui, head of APAC equity and derivatives

strategy at BNP Paribas.

Foreigners also offloaded $335 million of Thai stocks,

$266 million of Vietnamese stocks, Indonesian shares worth $229

million and $114 million in Philippine equities last month.

Yeap Jun Rong, a market strategist at trading platform IG,

said market volatility and global trade uncertainty continue to

persist in February, while the risks of further tit-for-tat

retaliation between the U.S. and China remain high.

"This may continue to warrant a cautious outlook on Asian

equities, which could still limit foreign inflows into the

region for the time being."