Asia rotation gains traction as China stimulus hopes fade

Equity strategists are increasingly bullish on Asia as a rotation play away from tired China stimulus narratives and toward more durable growth dynamics. South Korea has emerged as the surprising focal point, with Goldman Sachs reporting that the EWY ETFExchange-Traded Fund - a basket of securities trading like a single stock. now accounts for approximately 14% of all global equity ETF trading volume across a sample of 688 funds. This concentration signals that retail and institutional capital is actively repricing Korean tech and industrial names as beneficiaries of semiconductor cycles and US-allied geopolitical positioning. China's first-quarter marriage registrations fell to a record low, signaling persistent weakness in household formation and discretionary spending that suggests Beijing's stimulus measures are hitting ceiling effects. The Trump-Xi summit scheduled for Beijing is being carefully monitored for trade and tariff signals, with investors betting that a deal could accelerate capital flows into Asia ex-China. Taiwan Semiconductor Manufacturing Company is being cited as a direct play on Asia's structural advantage in chip production. Skeptics warn that the South Korea concentration itself is a crowding signal and cite historical precedent for momentumThe empirical fact that winners keep winning over the medium term. reversals when flow-driven rallies become consensus. Additionally, broader geopolitical risks in the Taiwan Strait and any escalation in US-China tensions could quickly reverse the Asia-positive narrative.