Expanded Foreign Selling Triggers Pressure
U.S. tech stocks have entered a correction, as market doubts grow over the monetization efficiency of massive artificial intelligence investments, accelerating international hot money outflows from Asian markets. A state-owned bank executive stressed that Taiwan stocks currently face a dual test of foreign capital outflows and pressure on the New Taiwan dollar exchange rate, compressing near-term upside for the index. Institutional investors noted that foreign investor moves will be key to whether Taiwan stocks can stabilize, as domestic capital alone cannot support the market, and a bottom still depends on whether foreign selling pressure eases.
Monthly and Daily Net Sell Amounts Climb
Looking at foreign investor moves, net sales of Taiwan stocks in October reached NT$994.317 billion, a record high for single-month net sales. Entering November, foreign investors net sold NT$73.521 billion, NT$107.307 billion, and NT$149.9 billion respectively in the first three trading days, with the amount expanding daily. A state-owned bank executive analyzed that whether driven by hedging trades, profit-taking, or hot money outflows, the continued expansion in net sales will weigh on Taiwan stocks, with whether selling narrows as an important focus ahead.
Dollar Strength and Policy Uncertainty Weigh on Liquidity
Overall liquidity is suppressed by two external variables. First is the U.S. dollar holding high and volatile, with international funds flowing back to dollar assets and pressuring non-U.S. currencies. Second is the unclear policy path of the U.S. Federal Reserve, with prolonged uncertainty over the interest rate outlook, coupled with the release of U.S. midterm election results and ongoing geopolitical risks, significantly cooling risk appetite among international institutions. Caught between capital outflows and pressure on the New Taiwan dollar, Taiwan stocks face reduced near-term rebound momentum, and the consolidation period may lengthen.
Key Signals for Bottoming and Strategy
Another state-owned financial holding executive analyzed that the market has recently seen a combined stock-and-currency selloff, with the New Taiwan dollar facing heavy depreciation pressure, making the exchange rate trend an important indicator to watch, as Taiwan stocks will only have a chance to bottom after depreciation halts. Although Taiwan stocks show signs of being oversold in the short term, bottoming still requires watching the New Taiwan dollar exchange rate, foreign net sell amounts, whether TSMC stabilizes, and U.S. stock performance. In addition, the recent reduction in margin balances remains insufficient, and continued deleveraging to wash out speculative positions would benefit the outlook. In terms of strategy, capital rotation has shifted from high-valuation tech stocks to low P/E, high-dividend-yield financial and traditional value stocks, and investors should strictly control positions and avoid rushing to bottom-fish.