US Tech Earnings Spark AI Monetization Concerns
US tech earnings were released in succession, with the market worried about the monetization of massive AI investments. Google and Amazon shares weakened, while Intel's fourth-quarter outlook came in far below market expectations, with its after-hours share price plunging over 21% at one point, spreading bearish sentiment to Taiwan stocks.
Taiwan Stocks Open Lower and Fall Below Six-Month Moving Average
Taiwan stocks opened lower at 46139.79 on the 30th and trended down, with the intraday low falling to 44726.26, down as much as 1642 points at one point. It closed at 45211.83, down 1156.5 points, or 2.49%, with turnover of NT$8777.3億元. The index fell below the six-month moving average of 45314, but held above the 45000 mark. The electronics subindex fell 2.9%, the financial index fell 0.16%, and the OTC index fell 4.42%. The weekly line fell 829.6 points for 3 straight declines, while the monthly line fell 2728.3 points to close lower.
Heavyweights and Sector Performance Diverge
Among heavyweights, TSMC fell NT$45 to close at NT$2370, down 1.86%, MediaTek and UMC fell over 3%, while Hon Hai, which held its Technology Day event, fell 1%, showing relative resilience. Delta Electronics, Walsin Technology and AUO closed limit-down, and Yageo fell over 7%. The PCB group was broadly weak, with Unimicron, Kinsus, Nan Ya PCB and Zhen Ding-KY closing lower, while ITEQ, Taiwan Union Technology and EMC fell about 8%. Panel stock Innolux fell 7.5%, while memory names Nanya Technology and Winbond fell about 4%. Shipping and telecom groups became safe havens for funds, with Evergreen and Wan Hai closing up over 4%, Yang Ming up over 2%, and Chunghwa Telecom closing at NT$160, a new record high. Most high-priced stocks were weak, with only ASMedia closing flat, stock king ASPEED closing down 5.95%, stock queen King Slide down over 2%, Chroma closing limit-down, and Unimicron falling out of the NT$1,000-plus club, reducing Taiwan stocks to 46 thousand-dollar stocks.
Institutional Investors Say Decline Has Entered Second Phase
Mega International Investment Services Deputy General Manager Huang Kuo-wei said selling pressure emerged after US heavyweight earnings reports, dragging Taiwan stocks sharply lower. Although fundamentals remain sound, the market continues to worry about AI investment monetization, and with Taiwan stocks having risen sharply in the first half and a high base, share prices face correction pressure. The long-term AI trend fundamentals are unchanged, with strong demand and abundant orders, but negative issues over fundraising to build plants to meet orders have emerged. Taiwan stocks approached 50,000 in early October and stabilized near the quarterly line after falling, but this break below the six-month moving average shows the decline has entered a second phase. If it fails to hold the six-month moving average in the near term, it may seek support at the 40,000 mark and near the annual line around 39,000.