Taipei gave back everything and then some on Thursday. The TAIEX opened higher on the back of Wednesday’s strong US tech close and ran to an intraday peak of 47,332.18 before reversing hard, finishing at 46,041.43 — the session low — down 846.34 points, or 1.81%, on an intraday swing of 1,290.75 points. (Some global index trackers recorded a reference close near 46,099, down 1.68%.) The close took the index below its quarterly and 5-day moving averages. Main-board turnover expanded to NT$879.23 billion, and the pain was worse down the cap scale: the TPEx (OTC) index dropped 3.47% to 381.69.
What turned the tape
The setup was deceptively friendly. Overnight on October 21, US equities closed firmly higher — the S&P 500 up 0.58% at 7,757.17, the Nasdaq up 1.05%, and the Philadelphia Semiconductor Index up 1.97% at 11,505.56. But S&P 500 futures rolled over during Asian hours, trading down 0.94% at 7,726.75, and that was the cue. Escalating Middle East tensions, a 3.52% plunge in South Korea’s KOSPI to 5,533.77, and local reluctance to carry risk into the Retrocession Day long weekend — with Typhoon Champi also approaching — all fed the profit-taking.
Semiconductors: strength sold, hard
TSMC (2330) opened NT$15 higher at NT$2,435 before turning with the market to close down NT$35, or 1.45%, at NT$2,385 — also its session low — single-handedly accounting for roughly 276 points of the index decline. MediaTek (2454) fell 3.14% to NT$4,010, UMC (2303) lost 1.95% to NT$125.50 despite announcing new technology-manufacturing collaboration with AP Memory, and the memory and wafer complex fared worse: Nanya Technology dropped over 5%, while GlobalWafers, Sino-American Silicon and Episil tumbled more than 6%.
The AI hardware chain retreated in sympathy — Hon Hai (2317) fell 2.00% to NT$245 and Quanta dropped NT$6.5 to NT$322 — and the recently red-hot PCB/CCL trade reversed intraday: Elite Material briefly hit limit-up before paring gains to hold above NT$5,000, and ITEQ swung from an intraday high to close down at NT$777. Capital rotated defensively into telecoms (Chunghwa Telecom firmer), financial holdings and select shipping names; the Financials & Insurance sub-index added 0.62% and Shipping 0.65%. Note the valuations being defended here: as of Wednesday’s TWSE data, MediaTek trades at 68.4x trailing earnings and TSMC at 28.1x.
Institutional flows: a NT$100 billion day
| Investor group | Net trading value (Oct 22) |
|---|---|
| Foreign investors | −NT$81.66B (net sell) |
| Investment trusts | +NT$8.87B (net buy) |
| Dealers (proprietary + hedge) | −NT$27.38B (net sell) |
| Three institutions combined | −NT$100.16B |
Foreign investors sold a net NT$81.66 billion on the main board, dealers sold NT$27.38 billion (NT$3.72 billion direct, NT$23.66 billion in hedging), and domestic investment trusts were the lone buyers at NT$8.87 billion. A combined NT$100 billion institutional outflow against NT$879 billion in turnover is the day’s defining statistic.
Positioning and leverage — prior-session data, read carefully
TAIFEX data for Thursday is not yet published, so the derivatives picture is as of Wednesday’s close (October 21): foreign investors held a net short 86,072 contracts of TAIEX futures open interest (day’s net volume +1,062), and the volume-based options put/call ratio stood at 111.88%. That describes the book carried into Thursday, not a reaction to it.
Taiwan’s three leverage channels, also as of Wednesday, told a mixed story. Market-wide margin loans — retail leveraged longs — rose NT$6.27 billion to NT$644.4 billion, so retail was still adding exposure into the top. In single names, TSMC saw retail margin longs rise 929 lots while the institutional SBL short balance grew by 1.03 million shares — leverage building on both sides of the same stock. Hon Hai showed the opposite: margin longs cut by 1,395 lots and SBL shorts covered by 3.04 million shares. Delta Electronics saw SBL shorts add 736,000 shares. SBL breadth was close to balanced, with balances rising in 448 issues and falling in 409.
FX and the ADR gap
The Taiwan dollar held up better than the equity outflows might suggest, with USD/TWD opening at 32.470 and ranging 32.450–32.572 (32.566 at midday); the pair ended the day around 32.53, slightly below the prior session’s roughly 32.58 — a marginally firmer Taiwan dollar. TSMC’s ADR closed at $431.89 in the US on October 21, roughly 17.8% above Thursday’s Taipei close on a per-share basis — comfortably inside the structural 15–25% premium band of recent years, and a comparison across different sessions besides. The level itself is not a signal; shifts in the gap are what to track.
What to watch
- Post-holiday follow-through: whether foreign cash selling extends beyond Thursday’s NT$81.66 billion once the market reopens after the Retrocession Day weekend — and whether Typhoon Champi disrupts the session calendar.
- Thursday’s TAIFEX prints: foreign TX net open interest was already −86,072 contracts as of Wednesday; the next release will show whether the futures short deepened alongside the cash dump.
- TSMC at NT$2,385: the stock closed at its session low with the index below its quarterly moving average — hold or break here, with S&P futures direction, sets the reopening tone.
Disclaimer: This is an information and analysis publication, not investment advice. See our Methodology for data sources, standards, and our corrections policy.