Foreign Capital Pulls 10.73 Billion As Taiwan Stocks Plunge 1,612 Points

The Taiwan Stock Exchange was subjected to unprecedented selling pressure today, with the Weighted Index recording historically rare, sharp declines both intraday and at the close. The index plunged by 1,612.60 points to finish trading at 43,307.54 points. This sudden black storm caught investors off guard, while market turnover surged to a record high of NT$928.58 billion. This indicated that, amid widespread panic, bulls and bears engaged in a fierce battle during trading, forcing massive amounts of capital to flee the market and creating a shocking chapter in the history of the Taiwan stock market.

A detailed analysis of today's trading flows revealed a distinct divergence between local and foreign institutional investors in the centralized market, with the movements of foreign and mainland Chinese capital inflicting the most severe damage on the broader market. Foreign investors executed massive withdrawals, posting a single-day net sell of over NT$107.3 billion, a figure that set the eighth-largest single-day net sell record in the history of the Taiwan stock market. Such large-scale and ruthless capital outflows reflect deep concerns in international capital markets regarding the current macroeconomic environment, geopolitical risks, or fundamental shifts in specific industries, prompting foreign investors to directly reduce their holdings in heavyweight and popular stocks to mitigate risk.

In addition to foreign investors acting as the primary source of selling pressure, local institutional traders also joined the selling side. Their net sell expanded today, bringing the combined net sell of the three major institutional investor groups to NT$146.456 billion. Under the weight of this massive selling pressure, only local investment trust funds demonstrated relatively firm support and absorption efforts, maintaining a net buy position intraday in an attempt to prop up the market in heavyweight stocks and specific sectors. However, their net buying was a drop in the bucket compared to the tsunami-level selling pressure from the combined forces of foreign investors and local traders, making it impossible to reverse the overall collapse of the broader market.

From a macroeconomic and market perspective, the Taiwan stock market has recently faced frequent tests from volatility in international financial markets. The monetary policy trajectory of the U.S. Federal Reserve, fluctuations in global inflation data, disappointing earnings reports from tech giants, and sharp swings in international currency markets are all key factors influencing foreign investors. When any slight disturbance emerges in overseas markets, Taiwan, as an export-oriented economy heavily reliant on external demand and holding a pivotal position in the global electronics component and semiconductor supply chain, sees foreign investors adopt the most direct risk-avoidance strategies. They withdraw capital from emerging markets like Taiwan to retreat to U.S. dollar assets or seek safer havens.

This rare single-day drop of over 1,000 points in the history of the Taiwan stock market represents not only a drastic revaluation of asset values for the domestic capital market and investors but also a rigorous shock education in risk management. The fact that trading volume exceeded NT$90 billion while the index plunged significantly signifies that market holdings are undergoing a highly chaotic turnover process, severely damaging short-term technical structures. Whether the market can stabilize and recover will depend on observing whether the momentum of foreign net selling subsides and whether international stock markets can recover. Additionally, the fundamental support from listed and OTC companies, as well as changes in the margin maintenance ratio, will be crucial indicators determining whether the Taiwan stock market can return to a bullish trajectory.

(Source: Central News Agency)