Nov 12 (Reuters) - Asian equities witnessed steep

cross-border outflows in the first week of November as investors

booked profits on caution over lofty tech valuations and

uncertainty about the sustainability of an extended market

rally.

Foreigners divested approximately $10.18 billion worth of

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

Vietnam and the Philippines for the week ended November 7 in a

turnaround from $2.28 billion worth of net purchase in October,

data compiled by LSEG showed.

South Korean stocks witnessed roughly $5.05 billion net

foreign outflows last week, reversing $4.21 billion inflows for

the prior month.

Taiwan stocks saw $3.86 billion net cross-border sales,

exceeding $3.21 billion outflows for October.

"Foreign outflows in Korea and Taiwan equities are primarily

driven by the weakness in leading AI-related companies, which is

consistent with the global headwinds across other markets such

as Japan and the US," said Jason Lui, the head of APAC equity

and derivative strategy at BNP Paribas.

The MSCI's Asia ex-Japan information technology sector index

lost 4.23% last week after registering 62.5%

gains in the six-month period through October. The MSCI's global

information technology sector index shed 4.38%

in the previous week.

"Renewed worries over elevated tech valuations have

triggered volatility, but solid fundamentals suggest current

levels are justified," said Mark Haefele, chief investment

officer, UBS Global Wealth Management.

"We forecast an earnings growth of 15% for global tech this

year, followed by a solid 12.5% increase in 2026."

LSEG data showed that the MSCI Asia Pacific ex-Japan index

had a 12-month forward PE ratio of 15.81, as of

end-October, the highest since June 2021.

Indian equities, meanwhile, saw a net $1.42 billion foreign

outflows last week after securing $1.66 billion in inflows in

October.

"India is now the biggest underweight in GEM portfolios and

only a quarter of funds we track are overweight India vs their

benchmark," according to an HSBC report last Friday.

"We see India as a good AI hedge and provides

diversification for those who feel uncomfortable with the AI

rally. India will be an outsized beneficiary of any additional

money coming into the EM region," the report said.

Vietnam and Thai stocks also saw foreign outflows of $95

million and $40 million, respectively, while Indonesia and the

Philippines attracted inflows of $207 million and $77 million,

respectively, in the previous week.