AI Feast Not Over? Taiwan Stock Market's Black Monday: Key Points and Analysis at a Glance

After a recent surge in tech stocks fueled by the artificial intelligence (AI) investment craze, selling pressure emerged. Combined with market fears that the Federal Reserve (Fed) might raise interest rates, U.S. stocks plunged last Friday. The Philadelphia Semiconductor Index tumbled 10.26%, AI bellwethers were deep in the red, and Taiwan stock index futures plunged 3,006 points in after-hours trading on Friday, the largest drop on record. Investment advisors pointed out that the market fears the AI feast may be ending early due to interest rates, and the Taiwan stock market is facing a correction.

Notably, U.S. stock index futures electronic trading showed a rebound today, indicating a calming of panic. E-Mini NASDAQ electronic trading rose over 1%, and E-Mini S&P and E-Mini Dow futures electronic trading were also in positive territory.

(Central News Agency, reporter Jiang Mingyan, Taipei, 8th) Following the U.S. stock market crash, Taiwan's stock market suffered a "Black Monday" today. It plunged 2,694 points in early trading, setting a new record for the largest intraday drop. It closed down 1,568.16 points, the third-largest closing drop on record. Bargain hunters stepped in, with TSMC odd-lot trading being the most active. Investment advisors believe the AI feast is not over yet. Central News Agency has compiled 6 key points for a comprehensive overview.

The AI investment craze had driven tech stocks higher recently, but selling pressure emerged. Coupled with concerns about a potential Fed rate hike, U.S. stocks plummeted last Friday. The Philadelphia Semiconductor Index fell 10.26%, AI stocks were battered, and Taiwan stock index futures dropped 3,006 points in after-hours trading on Friday, a record high. Investment advisors noted that the market is worried the AI party might end early due to interest rates, leading to a correction in the Taiwan stock market.

The TAIEX opened at 44,507.49 points today and dipped to 42,376.86 points in early trade, a plunge of 2,694 points. This surpassed the intraday drop of 2,086 points on April 7, 2025, setting a new record for the largest intraday drop in Taiwan's stock market history.

With bargain hunting, the TAIEX's losses narrowed during the session. The index closed at 43,502.78 points, holding above the monthly moving average of 43,116 points. It fell 1,568.16 points, the third-largest closing drop on record, following the 2,065-point drop on April 7, 2025, and the 1,807-point drop on August 5, 2024.

In terms of percentage decline, the TAIEX's closing loss of 3.48% today is far outside the top 10.

Analysts observed that compared to the Korea KOSPI index, which plunged 8% at the open and triggered a circuit breaker, and the Nikkei index, which fell over 4%, the Taiwan stock market showed relative resilience today.

TSMC's American Depositary Receipts (ADRs) fell 6.69% on Friday. TSMC's stock gapped down today, opening at NT$2,230, down NT$135, marking the largest intraday drop in dollar terms. However, as bargain hunters stepped in, TSMC's losses narrowed, briefly rising to NT$2,320. It closed at NT$2,295, defending its monthly moving average, down NT$70, with its market capitalization falling to NT$59.51 trillion.

Notably, TSMC's odd-lot trading was very active today. According to statistics, TSMC's intraday odd-lot trading value reached NT$17.346 billion, an increase of 19.3% from June 5, the highest among all Taiwan stocks.

According to the Taiwan Stock Exchange, the total market capitalization of listed companies today was NT$141.9291 trillion, a decrease of about NT$5.1 trillion from last Friday. The total market capitalization of the OTC market was NT$11.2707 trillion, a decrease of NT$506.434 billion from last Friday.

The three major institutional investors (foreign investors, investment trusts, and dealers) recorded a net sell of NT$133.928 billion today. Dealers sold a net NT$49.146 billion, investment trusts bought a net NT$9.069 billion, and foreign and Chinese investors sold a net NT$93.851 billion. The foreign net sell was the 7th largest on record.

It is noteworthy that U.S. stock index futures electronic trading showed a rebound today, indicating a calming of panic. E-Mini NASDAQ electronic trading rose over 1%, and E-Mini S&P and E-Mini Dow futures electronic trading were also in positive territory.

Huang Guowei, Vice President of Mega International Investment Advisory, said that although the Taiwan stock market plunged sharply in early trading, market panic did not spread. Given the substantial previous gains and relatively high margin maintenance ratios, there was no large-scale stop-loss or margin call selling pressure. Some funds even took the opportunity to buy on dips. However, he noted that today's drop was still the largest single-day decline in nearly two months, which has hurt market confidence, and a short-term consolidation pattern is inevitable.

Looking ahead, Huang pointed out that the upcoming U.S. Consumer Price Index (CPI) data is a key indicator to watch. If the data is higher than expected again, it could further fuel expectations of a rate hike, and market focus will shift to the Fed's interest rate decision meeting in mid-to-late June.

Taishin Investment Advisory analyzed that the market is worried the AI feast might end early due to interest rates, but TSMC and NVIDIA have just unveiled full-cycle expansion plans. "The U.S. stock market is overheated but not a bubble." The fundamentals of the Taiwan stock market show AI demand remains strong, but technically, it is undergoing a pullback after a rally. Active ETFs are becoming a new force in the Taiwan stock market. (Editor: Zhang Liangzhi) 1150608