US Stocks Plunge, Taiwan Futures Night Session Crashes 3,006 Points: Analyst Says Taiwan Stocks Face Heavy Pressure on Monday

(Central News Agency reporter Jiang Mingyan, Taipei, 6th) Selling pressure emerged in AI tech stocks, leading to a sharp decline in US stocks. The Philadelphia Semiconductor Index plunged more than 10%, and Taiwan stock index futures in the night session crashed 3,006 points. Investment consultants analyzed that Taiwan stocks will face heavy pressure on Monday, reflecting the short-term sharp rise in the index, the 'buy the rumor, sell the fact' effect following the conclusion of the Computex trade show, and market concerns over interest rate hikes.

After a recent surge driven by the artificial intelligence (AI) investment frenzy, selling pressure emerged in tech stocks. Coupled with market fears that the Federal Reserve (Fed) might raise interest rates, US stocks fell sharply today. The Dow Jones Industrial Average closed down 1.35%, the S&P 500 fell 2.64%, and the tech-heavy Nasdaq Composite dropped 4.18%. The Philadelphia Semiconductor Index plunged 10.26%.

Memory and advanced chip giants Micron, Intel, and AMD plummeted 13.25%, 11.28%, and 10.86%, respectively.

Marvell Technology, which had previously surged on the backing of Nvidia CEO Jensen Huang, fell sharply by 16.74%. Broadcom and Nvidia fell 7.92% and 6.19%, respectively.

TSMC ADRs (American Depositary Receipts) plunged 6.69%, UMC ADRs fell 5.24%, and ASE ADRs dropped 11.38%.

The Taiwan stock market on the 5th showed a high-level pullback and consolidation pattern, ultimately holding the 45,000-point level to close at 45,070.94 points, down 606.52 points. Foreign and Chinese institutional investors net sold NT$82.631 billion, the 12th largest net selling amount in history.

Taiwan stock index futures in the night session also collapsed, crashing 3,006 points, a decline of 6.65%, closing at 42,220 points, setting a record for the largest single-day drop in history.

Huang Wen-ching, Deputy General Manager of Taishin Investment Consulting, said in an interview with CNA that Taiwan stocks will face heavy pressure on Monday. This wave of the stock market saw a short-term sharp rise, starting from April and reaching a high of 46,552.16 points on June 3, hitting a record high, with a cumulative gain of 14,829 points.

Huang pointed out that this rally was mainly driven by listed companies successively revising their earnings forecasts upwards in April, the market consistently pricing in AI positives, and themes related to the June Taipei International Computer Show (COMPUTEX), which led to a continuous inflow of funds. However, with the conclusion of COMPUTEX, the related positive themes have come to an end, leading to a 'buy the rumor, sell the fact' effect. Some investors chose to take profits, creating selling pressure.

Additionally, the U.S. Bureau of Labor Statistics (BLS) reported that non-farm payrolls increased by 172,000 in May, higher than market expectations. Huang stated that the strong employment data raised market expectations for further rate hikes by the Fed, becoming one of the key triggers for the recent global stock market pullback.

He noted that there have been clear signs of foreign investor adjustment in the Taiwan stock market recently, with foreign investors recording significant net selling for two consecutive trading days, totaling over NT$150 billion. Furthermore, the unresolved risk of the US-Iran conflict, high international oil prices, and increased uncertainty over interest rate policies are all putting pressure on market investment confidence.

Overall, Huang believes that the duration and magnitude of this consolidation phase for Taiwan stocks may be larger than initially expected. In the short term, one can first observe the support level of 42,220 points in the Taiwan futures night session. If the consolidation period lengthens, a defense of the 40,000-point level cannot be ruled out.

Huang stated that looking back at past experiences in the Taiwan stock market, it is rare to see a situation of 'monthly gains and quarterly gains'. He predicts that this consolidation phase may extend until mid-July, at which point we can observe whether TSMC's earnings conference will release new positive catalysts. (Editor: Lin Shuyuan) 1150606