U.S. Stocks Plunge, Philadelphia Semiconductor Index Falls 7.2%
U.S. technology stocks were sold off again on October 30, with the Philadelphia Semiconductor Index plunging 7.2% and all four major U.S. stock indexes closing lower. Selling pressure still stemmed from market concerns over AI investment costs. Third-quarter earnings reported by Amazon and Intel earlier fell short of expectations. Amazon continued to expand AI capital expenditures, while Intel flagged cash burn warnings, with its shares plunging more than 28%. TSMC ADR fell 5.95% to close at $406.13.
Taiex Futures Night Session Falls 867 Points to Close at 44,433 Points
Dragged down by U.S. stocks, Taiex futures in the night session closed down 867 points, or 1.91%, at 44,433 points, below the intraday low of 44,726 points seen in Taiwan stocks on Friday. TSMC futures closed at NT$2,289, down NT$87, NT$81 lower than TSMC's Friday spot close of NT$2,370. Electronics futures fell 99 points, and electronics heavyweights are likely to bear the brunt on Monday.
Taiwan Stocks Fall 1,156 Points on Friday, Losing Half-Year Moving Average
Looking back at Friday's session, the Taiex plunged as much as 1,642 points intraday to a low of 44,726.26 points, closing at 45,211.83 points, down 1,156.5 points, or 2.49%, with turnover of NT$877.73 billion. TSMC closed at NT$2,370, down NT$45. The chip picture was equally weak, with the three major institutional investors selling a combined net NT$139.844 billion on Friday, including NT$112.467 billion by foreign investors and NT$51.37 billion by proprietary traders. Only investment trusts bought a net NT$23.993 billion, marking 14 consecutive days of net buying. Since October, the three major institutional investors have sold a cumulative net NT$1.1983 trillion.
Analysts Highlight Stubborn Margin Balances and Quarterly Moving Average Level
Senior analyst He Jincheng said on the program "Finance Morning Call" that Taiwan stocks' biggest problem now is margin balances refusing to retreat. Even after the sharp drop the previous day, margin balances increased, showing retail investors are still aggressively betting on a rebound, leaving the market relatively unstable. He believes there are two key signals for the market to stop falling. Securities analyst Zhang Chenhao also believes the market has fallen below the quarterly moving average and must quickly reclaim it next week, otherwise the consolidation period could be prolonged. He said margin washout remains insufficient and investors should stay cautious before chips settle, although some quality stocks have fallen to attractive value levels.
Midterm Elections in Focus, Defensive Targets in Spotlight
Next week the United States will hold midterm elections, another market focus. He Jincheng said that according to statistics since 1957, the probability of U.S. stocks rising from November through the end of December after midterm elections is as high as 84%. But with Trump's approval rating below 40%, markets worry Republicans could lose both chambers, which is the main reason for sharp volatility before the election. Cathay SITE Senior Vice President ZhengLicheng also expects market turmoil to stabilize after the election and remains bullish on the AI investment theme long term. On strategy, He Jincheng advised investors not to panic excessively, suggesting defensive targets such as government-supported financial stocks and Chunghwa Telecom, avoiding high-level stocks, focusing on stocks with record-high October revenue and better-than-expected third-quarter earnings, and strictly setting a 10% stop-loss. This content is for reference only and does not constitute any buy or sell recommendation. Investors should evaluate carefully and bear their own risks.