Asia pulls in biggest inflows since 2013

Foreign investors are piling money into major Asian equity markets outside of China at the fastest pace in seven years this quarter, as vaccine successes add to the global risk-on mood.

Nine regional stock markets have lured a combined about US$48 billion (HK$ 374.4 billion) since October 1, the most since the fourth quarter of 2013, according to Bloomberg. Japan is leading the way with US$27.4 billion, followed by India at US$9.2 billion. South Korea has received US$6.4 billion.

A series of encouraging results from vaccine makers have lent fresh impetus to the Asian equity rally spurred by Joe Biden's victory in the U.S. presidential election and the signing of a regional trade pact. Benchmark stock indexes in India and South Korea hit all-time highs this month, while in Japan the Nikkei 225 Stock Average has surged to a 29-year peak amid a rotation into cheap cyclical shares.

Margaret Yang, a strategist at DailyFX, said a catch-up rally may continue as investors reshuffle their portfolio in favor of cyclical sectors.

Meanwhile, Securities and Exchange Commission officials are pressing Chinese companies whose stocks are traded in the United States to make sure investors are aware of the potential risks they face because of limits on American regulators' ability to review their books.

Lawyers in the SEC unit that reviews corporate filings released staff guidance that notes the "substantially greater risk" that disclosures by Chinese firms may be incomplete or misleading. They cited concerns including inspectors being unable to review audits of China-based firms.