U.S. Pullback Sends Taiwan Stocks Lower
U.S. stocks closed lower across all four major indexes on Thursday, weighed down by divergent earnings from large technology stocks and rising concerns over returns on massive AI capital spending. Hit by the plunge in Google parent Alphabet shares, Taiwan stocks saw selling pressure return after yesterday's 667-point plunge. The weighted index opened at 46,139.79 points, down 228.54 points, then losses expanded rapidly, at one point plunging over 1,600 points intraday to a low of 44,726 points, falling below 45,000 points and the half-year moving average, as market panic rose and the short-term technical outlook came under renewed pressure.
Electronics Heavyweights Fall Across the Board
Among heavyweights, TSMC opened at 2,380, down 35, and fell to 2,360 intraday, down about 2%. MediaTek, set to hold an earnings call this afternoon, also came under pressure, falling to 3,805 in early trading, down as much as 6%. Selling in Delta Electronics was even heavier, repeatedly touching the limit-down price of 1,335, down 145. Hon Hai fell to 240.5 at one point, while ASE Technology Holding dropped to 624, down about 6%, as electronics heavyweights almost all collapsed. Panel stocks were among the hardest hit in early trading, with AUO plunging at the open after reporting a third-quarter loss per share of 0.33 yesterday, later falling to the limit-down price of 30.65, while Innolux also weakened, approaching limit-down.
Funds Rotate Into Food Stocks for Shelter
As electronics heavyweights were heavily sold, funds today rotated into defensive groups for shelter, with food stocks relatively resilient, becoming one of the few bright spots. Among them, Wei Chuan surged to the limit-up price of 13.55 in early trading, up 1.2, or 9.72%, while Ve Wong and Uni-President also showed relative resilience. With characteristics such as consumer staples demand, domestic demand markets, and relatively stable operations, food stocks attracted some inflows and became the intraday safe-haven focus.
Short Positioning Leaves Market Seeking Support
Analysts said Taiwan stocks have seen significantly increased volatility in the short term, affected by the U.S. tech pullback, foreign investor selling, and AI capital spending concerns. Yesterday, foreign investors' net short positions in TAIFEX futures rose to 89,522 contracts, approaching the 90,000-contract mark, with futures and spot positioning both skewed to the short side. Although the domestic economic signal has flashed red for 10 consecutive months, earnings from U.S. cloud service providers created headwinds, U.S. tech selling pressure has not eased, and margin balances have fallen less than the broader market, leaving margin conditions still to be digested. Taiwan stocks fell below the quarterly moving average yesterday and further broke below the half-year moving average today, and may continue to oscillate in search of support in the short term. Going forward, besides watching whether large heavyweights can stabilize, the fourth-quarter operating outlook, AI ASIC business progress, and gross margin changes to be released at MediaTek's earnings call this afternoon will also become an important basis for assessing the outlook for electronics stocks.