Taiwan market decline concerns grew on Monday as the Taiex fell sharply, pulled down by heavy selling in major electronics stocks. Investors reacted to renewed anxiety over whether rapid gains in AI-related shares have pushed valuations to unsustainable levels. The benchmark index dropped nearly 300 points as sentiment deteriorated throughout the session.
The Taiex briefly opened higher after modest gains in the United States late last week. Momentum faded quickly, however, and selling accelerated toward the close. Market analysts said the previous session on Wall Street did little to reassure investors because the shortened Thanksgiving trading day offered few signals about broader trends.
Taiwan market decline pressure centered on the country’s largest companies. TSMC remained the main source of weakness despite a small increase in its American depositary receipts the previous trading day. Its shares slipped more than 2 percent and were responsible for a significant share of the index’s losses. The electronics subindex also fell as investors shifted away from sectors tied closely to AI-driven demand.
Although sentiment was broadly negative, some technology names bucked the trend. MediaTek jumped after a major global investment firm raised its price target, citing strength in smartphone chip demand. United Microelectronics Corp. and Nanya Technology Corp. also posted gains as buying returned to certain semiconductor segments.
Outside electronics, the picture was mixed. Some companies linked indirectly to the tech supply chain benefited from stronger demand for industrial materials. Nan Ya Plastics rose on surging prices for copper-clad laminate used in circuit boards. Old-economy stocks with lower valuations also attracted buying, adding some stability to the market.
However, property developers underperformed as investors stayed cautious about companies sensitive to domestic cycles. Financial stocks moved in narrow ranges, with only small changes across the sector.
Foreign institutional investors played a major role in Monday’s downturn by selling a significant volume of shares. Market watchers said these outflows reflected a desire to reduce risk exposure amid uncertainty about global demand and high valuations in sectors tied to artificial intelligence.
As concerns about AI continue to shape sentiment, investors will watch whether upcoming economic data and earnings updates can ease fears or trigger further weakness.
