Taiwan Stocks Hit Record High Near 50,000 as Foreign Investors Sell

The Taipei stock market recently demonstrated strong momentum amid a mixture of bullish and bearish sentiments, with the intraday trading peak surging to 49,968.92 points, coming within a step of the 50,000-point milestone and setting a historic high. However, caution ahead of reaching this major threshold, combined with the approach of an extended holiday, created a strong wait-and-see atmosphere in the market, causing investors to noticeably pull back their buying. Although the weighted index closed last Thursday at 49,313.44 points—recording a weekly increase of 837.70 points, or approximately 1.73 percent, and successfully notating a fourth consecutive weekly gain—the risks associated with high-level fluctuations have simultaneously escalated, drawing high market attention.

As Taiwan's stocks repeatedly hit historic highs, the chip side displayed a subtle shift of domestic and foreign institutional investors trading against each other. According to the latest statistics released by the Taiwan Stock Exchange, foreign investors recorded a net sell total of NT$23.657 billion in the centralized market last week, marking the second consecutive week that foreign capital stood on the selling side. This continuous adjustment by foreign investors reflects a relatively conservative strategy adopted by international capital to remain vigilant in times of high valuation as the market approaches the psychological round-number threshold. Uncertainties in the international political and economic landscape, exchange rate fluctuations, and inventory adjustment cycles in the global technology industry are the primary considerations constraining foreign institutional investors in their handling of heavyweight stocks and leading them to lock in profits.

Nevertheless, despite the overall trend of foreign capital adjustments and net selling, a distinct counter-trend increase in operations was observed in specific industries and target selections, indicating that foreign capital has not completely withdrawn. Observing the movement of foreign capital chips last week, specific sectors such as Formosa Plastics and Winbond Electronics unexpectedly won favor from foreign investors, becoming safe havens or targets for low-priced accumulation. Such stock-selection logic shows that some foreign institutional investors, following significant gains in large-scale tech heavyweight stocks, have begun shifting their focus toward traditional industries and the memory sector—which feature relatively low bases, have passed industry troughs, or possess turnaround themes—to dynamically adjust and reshuffle their asset allocations.

From the perspective of macroeconomic and capital market structures, the ability of Taiwan's stock market to maintain its high level without falling and to repeatedly hit record highs despite continuous net selling by foreign capital is mainly attributed to the strong supporting momentum from domestic capital, local institutional investors, and a vast number of retail investors. The capital momentum of domestic investment trust funds, state-owned banks, and substantial private investors played a role in stabilizing market confidence ahead of the holiday effect. This phenomenon of divergence between domestic and foreign capital highlights that the current bull market pattern in Taiwan's stocks no longer depends solely on the direction of foreign capital, but is instead jointly constructed by domestic and local funds to build a solid bottom support, demonstrating the depth and resilience of Taiwan's capital market.

Looking ahead to the subsequent market development, Taiwan's stock market is expected to continually face tests of high-level profit-taking selling pressure and volume changes on its path to challenging the historic 50,000-point milestone. In addition to closely observing whether the net selling trend of foreign capital will expand further and monitoring the performance of international stock markets, particularly U.S. tech stocks, investors must also watch out for variables such as domestic macroeconomic data, corporate financial reports, and geopolitical risks. As the index sits at a relatively high historical level, the speed of sector rotation is expected to accelerate, making the fundamentals and chip distribution of individual stocks the key factors in determining success or failure. Market participants should maintain risk awareness and respond prudently to market fluctuations.

(Source: Central News Agency)