Foreign selling in Asian equities rises as bond yields climb

May 20 (Reuters) - Foreign selling ‌in Asian ​equities ​has accelerated so far in May as investors turn cautious over the impact of war-driven inflation ‌and higher borrowing costs on corporate margins across the ⁠region.

Foreign investors have so far sold a net $24.75 billion of regional equities ‌this month, with a ‌record $17.27 billion of shares divested in the last week, LSEG data covering exchanges in South Korea, Taiwan, Thailand, India, ​Indonesia, Vietnam and the Philippines showed.

The 30-year U.S. Treasury yield climbed to its highest level since 2007 this ⁠week, adding pressure on Asian equities as higher long-term borrowing costs weighed on valuations, ​particularly in growth-heavy markets.

"Higher yields could increase pressure on equities as tighter financial conditions could weigh ​on valuations, particularly in growth sectors," ‌said Paolo Broccardo, CEO at BankPro, in a note.

South Korean stocks faced a record $13.14 billion ⁠worth of foreign outflows in the last week. Last week, investors also divested $2.88 billion of local shares in Taiwan, $1.35 billion in ⁠India and $184 million in Indonesia.

"Mainland China H-share, Hong Kong, Korea and Taiwan ​equities are traditionally most sensitive to an increase in yields," said Herald van der Linde, head of equity strategy for Asia Pacific at ‌HSBC.

"30% of Asian funds’ exposure is to a handful of stocks in Korea and Taiwan. ‌Any de-risking may cause more volatility in these markets," HSBC's ⁠Linde said.

Indonesian and Thai stocks ‌have, however, still ​attracted $511 million and $215 million of foreign inflows, so far this month.

(Reporting by Gaurav Dogra; Editing by Hugh ‌Lawson)

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