Sharp U.S. Selloff Drags Taiex Below Moving Averages
Weighed down by weaker-than-expected earnings from U.S. tech giants and growing market concerns over AI investment returns, the U.S. stock decline affected Taiex performance. The Taiex fell below its quarterly line at 46540 points and half-year line at 45314 points in the short term, and with continued sharp losses in U.S. tech stocks last Friday, downward pressure remains tomorrow. On the last trading day of October, the Taiex weighted index plunged 1156.50 points, or 2.49%, falling below the 46000 mark to close at 45211.83 points. Since hitting a record high of 49822 points on October 6 this year, the weighted index has corrected by 9.25%.
Investment Trusts: Solid Fundamentals, Divergent Positioning
Guo Mingyu, manager of Active E.SUN Key Technology (00413A), said the Taiex currently shows a pattern of "solid fundamentals, divergent positioning." In the short term, affected by foreign investor operations and margin financing changes, market positioning volatility has intensified, but the corporate earnings growth trend and long-term development momentum of the technology industry remain unchanged. Overall, the medium- to long-term outlook for the Taiex remains cautiously optimistic. At present, technology industry fundamentals show no significant change, and quality companies still attract buying support after price pullbacks, making active stock selection even more important.
AI Demand Drives Economic and Earnings Outlook
Guo Xiucheng, manager of Dahua Elite High Dividend 30 (00918), said that according to Taiwan's latest macroeconomic and industry research reports, driven by strong AI industry demand, Taiwan's economic growth rates for 2026 and 2027 are forecast at 12.63% and 7.65% respectively, showing fundamentals remain solid. Guo Mingyu analyzed that although the market has fluctuated due to short-term news shocks, corporate earnings forecasts continue to be revised upward, and noted Goldman Sachs forecasts Taiex corporate earnings per share growth of up to 30% in 2027, showing technology and semiconductor industries will remain the core engine driving Taiwan's economic and capital market growth.
Short-Term Caution, Staged Accumulation of Quality Stocks
Regarding strategy, Guo Xiucheng suggested that although the broader market's short-term positioning is less favorable, with investment trusts remaining overbought but foreign investors turning to selling, leading to strong short-term wait-and-see sentiment, with continued growth in TWSE/TPEx-listed companies' operations in the fourth quarter and protection from upcoming AI Shinkong new products launches, once foreign investor selling eases or turns to net buying, the Taiex will have strong rebound potential. Guo Mingyu said investors can wait for margin balances to settle further and capital to flow back before accumulating in stages quality companies with long-term competitive advantages and growth potential. Guo Mingyu remains optimistic about optical communications, advanced process and other core AI beneficiary groups, as well as wafer foundry, packaging and testing and interface technologies, memory, semiconductor equipment and consumables, specialty chemicals, ASIC/IP silicon intellectual property, AI servers, as well as power management, thermal modules, CCL/PCB and MLCC; in non-electronics, she favors mechanical components, heavy electrical equipment, and financial insurance.