Typhoon Holidays Shorten Trading Week, Index Falls for Second Straight Week
Last week, affected by typhoon holidays, Taiwan stocks traded for only 4 sessions. Amid profit-taking in AI stocks and foreign-investor selling pressure, the weighted index closed at 46,041.43 points, down 1,069.83 points or 2.27% for the week, marking a second straight weekly decline. This week the market will focus on the Federal Reserve decision, earnings from U.S. tech giants, and investor conferences held by major Taiwan technology companies, with attention on AI capital expenditure and earnings outlooks to set the tone for electronics stocks.
Institutional Investors Sell 2832 Billion, Investment Trusts Buy Against the Trend
The three major institutional investors sold a net NT$283.226 billion last week, including NT$235.626 billion in net selling by foreign investors and NT$112.791 billion by dealers, while investment trusts bought a net NT$65.191 billion against the trend. Foreign investors have reduced holdings for 4 consecutive weeks. Domestic and foreign investors remain divergent in their operations, and investment-trust buying remains insufficient to offset overall selling pressure. The chip outlook remains weak. It remains to be seen whether foreign-investor selling pressure can ease to gauge the strength of a stabilization in electronics stocks.
Semiconductors See Over 130,000 Lots Sold, Funds Rotate to Traditional Industries and OEMs
Last week, foreign investors' top net-sold listed stock was Powerchip with 61,745 lots, followed by TSMC with 38,049 lots and UMC with 37,426 lots. The three combined saw over 130,000 lots sold, placing clear chip pressure on the semiconductor group. On the other hand, foreign investors' top net-bought listed stock was China Steel with 54,785 lots, followed by Wistron with 54,631 lots and Compal with 35,187 lots in second and third place, while Formosa Petrochemical and Taiwan Cement also received additional buying. Judging from the distribution of net buying, funds were allocated to both traditional industries and electronics OEMs, showing that while reducing overall positions, foreign investors still selectively took on individual stocks. The market showed a rotation pattern. Investor conferences by major technology companies and their demand outlooks can be watched going forward.
Allianz: Correction Driven by Sentiment, Long-Term AI Trend Unchanged
The Allianz Taiwan equities team analyzed that the recent international macroeconomic environment has been continuously disturbed, including rising geopolitical risks in the Middle East and Russia-Ukraine, fluctuating U.S. inflation data, European political events, and market concerns over high capital expenditure and debt pressures at some AI companies, leading to cooling investor risk appetite. U.S. technology stocks have recently undergone a correction, causing Taiwan stocks to fluctuate in tandem, with AI-related groups that had previously risen more facing more明显 profit-taking selling pressure. However, industry fundamentals have not weakened. Global large cloud service providers continue to expand capital expenditure, showing AI infrastructure investment remains in a long-term expansion phase. Taiwan's leading foundry recently maintained an乐观 fourth-quarter revenue outlook and expects capital expenditure from 2026 to 2028 to be significantly higher than in the past 3 years, reflecting still-strong end demand. Overall, the market correction mainly reflects valuation and sentiment adjustments. Allianz Taiwan Dam Fund and Allianz Taiwan Technology Fund manager 蕭惠中 pointed out that despite short-term market volatility and consolidation, with funds turning conservative amid international market volatility and technology-stock correction pressure, some AI supply chains and stocks with fundamental support have shown relatively resilient performance. The main focus of funds remains around AI, semiconductors, and high-performance computing-related industries, showing investors remain confident in the long-term growth momentum of AI.