Taipei: Shares in Taiwan experienced a significant downturn on Monday, primarily driven by artificial intelligence-related stocks, as the market followed substantial losses in the United States from the previous Friday. Concerns about an AI bubble continued to loom, influencing the market’s performance, dealers reported. The Taiex, Taiwan Stock Exchange’s benchmark index, concluded the day with a decrease of 331.08 points, or 1.17 percent, settling at 27,866.94. Throughout the day, the index fluctuated between 28,119.79 and 27,684.87, with a total turnover amounting to NT$436.78 billion (US$13.95 billion).
According to Focus Taiwan, the market commenced trading with a 0.28 percent decline, and selling pressure intensified, particularly focusing on AI-related stocks. This followed a 1.69 percent drop in the tech-heavy Nasdaq index on Friday, which was triggered by lower-than-expected guidance from American chip designer Qualcomm Inc., sparking concerns over an AI bubble. Moore Securities Investment Consulting analyst Adam Lin noted that investors took the opportunity presented by the U.S. tech weakness to capitalize on their recent gains, with Taiwan Semiconductor Manufacturing Co. (TSMC), a key AI stock, facing substantial pressure.
TSMC, the most heavily weighted stock in the market, saw a decline of 2.03 percent, closing at NT$1,450.00. The losses in TSMC alone contributed approximately 240 points to the Taiex’s downturn. Other notable declines included IC packaging and testing services provider ASE Technology Holding Co., which dropped 3.90 percent to NT$234.00, and Global Unichip Corp., TSMC’s ASIC design subsidiary, which fell 3.30 percent to NT$234.00. Conversely, MediaTek Inc., a smartphone IC designer, gained 1.07 percent, ending at NT$1,420.00.
Concerns over an AI bubble also negatively impacted AI server maker and iPhone assembler Hai Precision Industry Co., which fell 2.42 percent to NT$221.50. Similarly, Wistron Corp., another AI server supplier, closed down 1.39 percent at NT$141.50. Despite the downturn in tech stocks, Lin observed that funds rotated out of the tech sector and into select old economy stocks, providing some support to the broader market. For instance, Formosa Plastics Corp. increased 2.51 percent to NT$40.90, while Formosa Chemicals and Fibre Corp. surged 5.96 percent to NT$33.80 due to their relatively low valuations.
Additionally, Allis Electric Co. experienced a 0.99 percent rise, closing at NT$102.00, and Luxe Green Energy Technology Co. soared 7.18 percent to NT$20.15, driven by the government’s focus on renewable energy development. In the financial sector, which saw a modest increase of 0.17 percent, CTBC Financial Holding Co. added 0.54 percent to close at NT$46.75, and Mega Financial Holding Co. rose 0.73 percent to NT$41.45.
Lin pointed out that the Taiex managed to recover slightly from a low point when the index approached the nearest technical support level at 27,553, the 20-day moving average. However, he cautioned that the market might encounter significant technical obstacles near 28,568, the intraday high recorded on Thursday. According to TWSE, foreign institutional investors sold a net NT$48.99 billion worth of shares on the main board Monday.