Taiwan stocks plunge over 1,000 points as TSMC buffers heavy losses

The Taipei stock market experienced a remarkably violent volatility and washout session today. After opening lower in the morning, the index briefly rebounded into positive territory in an attempt to defend higher levels. However, selling pressure subsequently surged, driving the index lower throughout the session. The intraday low touched 42,943.50 points, resulting in a high-low trading range as wide as 1,581.74 points. Ultimately, the weighted index plummeted 1,165.28 points, or 2.63 percent, closing at 43,091.87 points and narrowly defending the 43,000 integer psychological mark. Trading volume remained at a high level of NT$1.013293 trillion, reflecting intense battles between market bulls and bears.

Amid this strong downward wave, heavyweight bellwether TSMC acted as the primary driver of the decline. As the anchor of the Taiwan stock market, TSMC's share price was targeted by selling pressure from foreign institutional investors and corporate entities today, closing down NT$55 and imposing heavy downward pressure on the broader market index. In addition to TSMC, other electronic heavyweight stocks and high-priced shares across the market also faced adjustment selling pressure. This not only reflects the sensitive nerves of the international semiconductor supply chain amid recent macroeconomic variables, but also highlights that as Taiwan stocks sit near historical highs, investors' awareness of profit-taking and risk management is rising sharply.

A deeper analysis of the recent market context reveals that after experiencing a prolonged wave of gains and repeatedly hitting record highs, the index has seen corresponding increases in margin purchase balances and market trading volume. In this environment of abundant capital momentum coupled with heightened volatility, any minor disturbance can easily trigger domino effects of long liquidation through programmatic trading and margin calls. Today's intraday violent volatility exceeding 1,500 points precisely illustrates the fierce tug-of-war between the willingness to chase prices and a cautious mindset at elevated levels. Although trading volume remains at the trillion-dollar scale—indicating that market capital has not completely withdrawn—the technical structure of market chips clearly shows signs of disorder and loosening.

From a macroeconomic and international financial market perspective, the Taiwan stock market is highly correlated with the business cycles of the global tech industry and the monetary policy trajectory of the U.S. Federal Reserve. Recently, global financial markets have continued to face multiple tests, including recurring inflation data, uncertain interest rate directions, and geopolitical risks. The movements of foreign institutional investors in both the cash and futures markets are key factors dictating the direction of Taiwan stocks. When international stock markets undergo downward corrections, foreign investors frequently adjust heavyweights such as TSMC to repatriate capital or engage in hedging, often causing Taiwan stocks to experience sharper downward corrections when facing external pressures.

Looking ahead, after enduring today's thousand-point plunge and narrowly holding the 43,000-point mark, the short-term technical structure of the Taiwan stock market has been damaged, and market confidence will take time to settle and repair. In addition to closely monitoring the trends of major international stock markets, investors should pay closer attention to the movements of institutional capital, whether trading volume can either experience a healthy contraction or reconverge, and the industry outlooks released by heavyweight enterprises during financial reports and institutional investor conferences. At a time of intensified market volatility, strictly controlling portfolio risk and examining whether fundamentals remain solid will be crucial tasks in navigating the current high-altitude volatile landscape of the Taiwan stock market. (Source: Central News Agency)