Taiwanese stocks tumbled yesterday as global risk aversion intensified, with the benchmark TAIEX sliding 3.61 percent, or 991 points, marking the sixth-largest single-day point drop in history, brokers said.
The retreat surpassed that of Hong Kong’s Hang Seng Index, which fell 2.38 percent, and Japan’s Nikkei 225, down 2.4 percent, but was slightly milder than South Korea’s KOSPI, which fell 3.79 percent.
Investors accelerated selling amid growing uncertainty over whether the US Federal Reserve would cut interest rates following stronger-than-expected US job data.
Photo: CNA
Local stocks opened sharply lower and plunged more than 1,000 points at one point. Turnover totaled NT$549.8 billion (US$17.49 billion), reflecting heightened investor anxiety.
“Concerns over artificial intelligence [AI] valuations have resurfaced, weighing on tech and AI-themed names,” Allianz Global Investors Taiwan (安聯投信) said. “The combination of lofty valuations in AI-related shares and lower odds of a rate cut has pressured global tech stocks, with the effects spilling over into Taiwan.”
The latest US nonfarm payroll report released on Thursday showed an unexpected addition of 119,000 jobs in September, significantly reducing expectations that the Fed would cut rates next month.
Allianz Taiwan said that volatility driven by market sentiment was likely to persist, as investors continue to monitor developments in AI applications and global monetary policy.
Leading the sell-off was Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, which fell 4.81 percent to NT$1,385. The drop followed cues from US clients, including Nvidia Corp and Advanced Micro Devices Inc, highlighting the sensitivity of Taiwan’s tech-heavy index to global developments.
Foreign investors were net sellers of NT$91.54 billion, marking the largest net sell-off of the year and the fourth-largest in Taiwan’s history. Mutual funds reported net selling of NT$1.26 billion, while proprietary traders reduced positions by NT$15.27 billion.
Despite the heavy selling, analysts said that the movement reflected selective portfolio adjustments rather than a wholesale exit.
BNP Paribas APAC equity and derivative strategy said that recent capital outflows from South Korea and Taiwan were partly profit-taking and partly a reassessment of stretched valuations in AI and semiconductor stocks.
Global investors are rotating, being more selective, and rethinking how they should allocate to Asia, it said, adding that this movement is largely about portfolio rebalancing and risk management rather than a full-blown exit.
The reassessment also weighed on the New Taiwan dollar, which weakened NT$0.135 against the US dollar to close at NT$31.43.
Analysts said that elevated global risk sentiment could keep volatility high across both equity and foreign exchange markets.
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