Taiwan Stocks Plummet 8.4% in Record Drop, Led by Tech Sell-off

Taipei: Taiwan’s stock market experienced a historic decline on Monday, plunging 8.4%, with significant losses in tech stocks like TSMC. Investors, rattled by the grim outlook for global tech stocks and the U.S. economy, sold off one of Asia’s top-performing markets this year.

The main index dropped by 1,807.21 points, marking its steepest one-day percentage fall, closing at 19,830.88, a low not seen since April 23. The downturn, initially driven by a tech sell-off, broadened as the index fell below the critical 20,000 mark.

David Wu, an analyst at Cathay Futures Consulting Department in Taipei, commented, “It’s challenging to predict when this decline will halt. It’s too early to determine.”

The decline in Taiwan was part of a broader market sell-off across Asia on Monday, triggered by fears of a potential U.S. recession and escalating conflict in the Middle East, which pushed investors towards safer assets.

The Taiwan Stock Exchange announced it would hold a media conference at 3 p.m. (0700 GMT) to address recent market movements and outline contingency response plans. No additional details were provided.

Late last week, a two-day downturn left the S&P 500 nearly 6% below its July peak, while the Nasdaq Composite extended its losses, marking its first 10% correction from a record high since early 2022.

Allen Huang, Vice President of Mega International Investment Services, told Reuters, “We anticipate the decline to continue over the next two days, targeting technical support levels between 19,200-19,300 points.”

Taiwan Semiconductor Manufacturing (TSMC), the world’s largest contract chipmaker, faced significant losses. Despite a surge in demand for chips used in artificial intelligence over the past year, TSMC’s stock plummeted 9.75%, nearing the daily limit of 10%, to close at T$815.

“The fundamentals for TSMC remain unchanged. Although there were rumors last week about delays in Nvidia’s new GB 200 chips and disappointing earnings from Intel, these events do not impact TSMC or the upstream AI supply chain,” Huang added.

Taiwan’s Minister of Economic Affairs, JK Guo, warned that investors should brace for further potential declines. “Everyone must be prepared for a global stock market downturn; this is part of the business cycle,” Guo told reporters.