The TAIEX yesterday plunged an unprecedented 8.35 percent, or 1,807.21 points, to close at 19,830.88, with major artificial intelligence (AI) firms falling by the daily 10 percent limit amid reports of economic weakness in the US and heightened geopolitical tensions, analysts said.
The crash came amid panic sell-offs across Asian bourses and almost wiped out the gains seen earlier this year, with the benchmark falling below the psychological 20,000-point mark.
Foreign institutional investors offloaded NT$69.96 billion of local shares yesterday, compared with a record-high NT$96.66 billion on Friday, Taiwan Stock Exchange Corp data showed.
Photo: Taipei Times
The exchange urged investors at an emergency news conference to stay calm, saying it would introduce stabilizing measures if necessary.
“We don’t see the need for such measures at present,” Taiwan Stock Exchange Corp president Chien Lih-chung (簡立忠) said, adding that Taiwan’s economy remains on course for a healthy recovery.
Companies in the AI supply chain bore the brunt, as Nvidia Corp postponed the delivery of the latest chips in its Blackwell series due to a design defect.
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, tumbled 9.75 percent to NT$815 after touching the 10 percent limit.
As TSMC accounts for more than 30 percent of the TAIEX, its loss contributed about 710 points alone to the benchmark’s fall, exchange data showed.
That underscored how quickly sentiment has pivoted from the potential of AI to focusing on the risks of a US recession and disappointing earnings outlooks from companies including Intel Corp, analysts said.
Taiwan, South Korea and Japan were the worst stock performers in Asia yesterday, a reflection of their export-oriented economies and their reliance on the world’s biggest economy, they said.
“Taiwan has been one of the best-performing markets this year together with Japanese equities, driven by a combination of cheap funding through the Japanese yen and strong sentiment around AI,” Saxo Bank head of equity strategy Peter Garnry said. “With both factors reversing now, a lot of traders are exiting with their gains. I think it is a classic momentum crash, which is a well-studied phenomenon.”
Tech news outlet The Information last week reported that Nvidia had told customers that the rollout of the most advanced chips in its Blackwell series would be delayed by three months or longer due to unexpected design flaws.
AI server suppliers Hon Hai Precision Industry Co (鴻海精密), Quanta Computer Inc (廣達) and Wistron Corp (緯創) fared even worse than TSMC, closing down by the daily limit, exchange data showed.
The Ministry of Finance, which is responsible for the activation of the NT$500 billion National Stabilization Fund, said it would closely monitor developments on domestic and overseas markets.
The Financial Supervisory Commission said it would intervene in the market once investors’ collateral to loan ratio falls below 150. Exchange data showed that the ratio was 163.54 on Friday.
First Securities Investment Trust Co (第一金投信) yesterday issued a report advising investors to lower their stock positions, noting that sentiment has taken a negative shift, while heightening tensions over a military conflict in the Middle East had added to the jitters, Masterlink Securities Investment Advisory (元富投顧) said.
Additional reporting by Bloomberg and CNA
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
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