U.S. Selloff Drags Taiwan Stocks Below 40000 Points and Annual Line
Dragged down by rising U.S. AI regulation concerns, U.S. stocks fell sharply across the board, and Taiwan stocks extended panic selling today, at one point plunging 3737 points intraday, losing the 40000-point整数关卡 and the annual line in succession and setting a record for the largest single-day point drop in history. FSC Chairman Peng Jin-lung confirmed in the morning that market stabilization measures will be announced in the afternoon. U.S. stocks saw the four major indexes post heavy-volume long black candles yesterday, with all 11 S&P sectors falling, dragging Taiwan stocks lower at the open, with even defensive financial shares falling. The number of listed gainers hitting limit-down at one point reached about 500, before losses on the TAIEX and over-the-counter index narrowed, with limit-down names shrinking to about 39, and the decline narrowing markedly around midday amid government confidence-boosting remarks.
Analysts See Halting Decline and Bottoming; V-Shaped Reversal Awaits Clearer Politics
Huanan Financial Holding investment advisory analyst Hsu Chia-hao noted that the selloff mainly extends panic selling from U.S. stocks, and government stabilization measures will help halt the short-term decline and build a base, but with the index now near the annual line, the chance of a rapid V-shaped rebound back to highs has diminished, and the market may oscillate repeatedly between the annual line and the half-year line to build a bottom, still awaiting a clearer U.S. political situation to restore investor confidence. First Financial Investment Advisory Chairman Huang Yi-ting said that whether it is the National Stabilization Fund or FSC rescue measures, they usually help halt the short-term decline and build a base, but whether a rapid V-shaped reversal is possible still depends on fundamentals cooperating, with developments in U.S. politics and AI regulation-related policies still to become clearer, and investor confidence only likely to recover once political uncertainty eases. Taiwan stocks today showed a clear lower shadow, and even if the short-term decline halts, the chance of an immediate V-shaped move back to prior highs has also diminished, and as some investors bought the dip on the way down, any rebound will still face selling pressure, with wide swings likely for some time.
Stabilization Signals and Strategy: Cut Losers, Keep Winners, Avoid Leverage
As for stabilization indicators, Hsu Chia-hao cited signals including the TAIEX or over-the-counter index no longer making new lows for two candlesticks, individual stocks not breaking lows for 3 consecutive days, the New Taiwan dollar no longer depreciating, and foreign-investor futures shorts or spot selling pressure easing, all of which can be seen as preliminary stabilization signals. For short-term trading, focus first on technicals and cut weak holdings while keeping strong ones; if the TAIEX holds above the 5-day moving average while a stock remains below its own 5-day moving average, such stocks can be ignored for now. Huang Yi-ting advised against using leverage casually when buying on dips, saying stock and sector selection matters even more, with short-term rebounds focused on large-cap electronics heavyweights highly correlated with the index, or quality heavyweights that have been oversold, or market-cap ETFs closely tied to the index, while thematic stocks and high P/E stocks still carry short-term risk and should be traded cautiously.