Taiex Plunges in Single Day, Falls Below Half-Year Line
Taiwan stocks saw sharp volatility on the 30th, with the weighted index falling as much as 1642.07 points intraday to a low of 44726.26 points, narrowing losses into the close to finish at 45211.83 points, down 1156.50 points, or 2.49%, with turnover of 8777.3 billion yuan, falling below the half-year line. Heavyweight stocks were weak, with TSMC (2330) falling NT$45 to close at NT$2370, and Delta Electronics (2308) plunging to limit-down to close at NT$1335. Looking back at October trading, Taiwan stocks surged to 49968 points early in the month before trending lower, with a monthly cumulative decline of 2728.30 points, or 5.69%, as market sentiment turned cautious and investors worried about renewed selling pressure at the open on Monday, November 2.
October Foreign Net Selling Nears NT$1 Trillion, a Record High
Foreign selling pressure was key to this round of volatility. According to Taiwan Stock Exchange statistics, foreign investors sold a net 1124.67 billion yuan on the 30th, the 7th largest single-day net selling on record, with the three major institutional investors selling a combined 1398.44 billion yuan. For the whole of October, foreign investors sold a cumulative net 9943.17 billion yuan, approaching the trillion-yuan mark and setting a record for the largest single-month net selling in history.
Juan Ching-hua: Pullback After Gains Is a Normal Cycle
Deputy Minister of Finance and National Stabilization Fund Executive Secretary Juan Ching-hua said on the 30th while attending the 25th anniversary celebration of the Taiwan Financial Asset Service Corporation that a market pullback after gains is a normal cycle, as the market cannot rise every day, and that foreign capital naturally adjusts positions in line with market conditions and cannot keep buying, so net selling is also normal. He did not explicitly state that market support measures would be launched.
Intervention Hinges on Changes in Three Key Areas
On when the National Stabilization Fund might act, Juan Ching-hua stressed that markets rise and fall, and pulling back after gains and rising again after a pullback are normal market cycles. What really needs attention is whether there are major changes in industry fundamentals, the overall economy, or the international situation. Only if major problems emerge in industry, the economy, or international conditions will special attention be needed, with a response to be assessed at that time. The Financial Supervisory Commission also said it will continue to monitor international financial markets and Taiwan stock volatility, noting that listed companies' revenue performance remains supportive and that the overall margin maintenance ratio for credit trading remains above 180%. As Taiwan stocks approach the first trading day of November, the market will continue to watch foreign investor moves and whether electronics heavyweights can stop falling.