Capital Exits AI and Rotates Into Defensive Sectors
As concerns over AI development heated up, global stock markets saw heightened volatility in October, with funds gradually withdrawing from technology stocks and high P/E groups. Foreign investors have sold a net nearly NT$1 trillion of Taiwan stocks since October, setting a record for the largest monthly net selling in history. The Taiwan Weighted Index fell 5.69% over the same period, while the OTC index dropped 11.22%, with small- and mid-cap stocks facing heavier selling pressure, divergent individual stock performance, and rising correction pressure.
Looking at international markets, declines were concentrated in markets with higher AI weightings, with South Korea's KOSPI plunging 16.19%, the Philadelphia Semiconductor Index falling 15.36%, and the Nikkei Index dropping 5.19%. In contrast, the Dow Jones rose 1.7% against the trend, while the S&P 500 edged down only 0.93%, holding at highs. Institutions believe this shows funds are not withdrawing across the board, but retreating from AI and high P/E technology stocks and shifting toward defensive sector allocation.
15 Stocks Rise Against Trend on Foreign Buying
Large-cap electronics stocks were clearly under pressure, with 台積電 falling 4.44% in the month and breaking below its half-year moving average. 台達電 hit limit-down on October 30 and plunged 29.37% in the month, the steepest drop among large-cap electronics stocks. Relatively defensive and traditional industry-themed groups were resilient, with 台塑 Four Treasures, the shipping Big Three and financial stocks all closing higher in the month, including 美好證 up 35.65% and 南亞 up 15.85%, showing relatively strong performance.
According to CMoney statistics, screening for net foreign buying in October, shareholding ratio over 15% and rising share prices against the trend, 15 stocks made the list, including 穩懋, 台表科, 長榮, 中華電, 鈊象, 兆豐金, 陽明, 元大金, 統一, 和碩, 統一超, 瑞昱, 中信金, 台灣大 and 聯詠, covering defensive groups such as finance, shipping, telecom and consumer staples. Net buying in the top four all exceeded NT$10 billion, with 穩懋 leading at NT$30.44 billion, 台表科 at NT$10.826 billion, 長榮 at NT$10.647 billion, and 中華電 at NT$10.104 billion. 統一超 was bought for 17 consecutive trading days, while 台灣大, 中華電 and 長榮 were bought for 12, 8 and 7 consecutive trading days respectively, with relatively stable chips. As market volatility persists, they are expected to show resilience against declines in the short term.