Taiex plunges below 40,000 as AI investment concerns grow deeper

Taiwan's Taiex benchmark index plunged below 40,000 points as mounting uncertainties over returns on AI investments triggered intense selling of tech equities. Heavyweight TSMC led the downturn, contributing significantly to the market's sharp fall.

Taiex falls below 40,000 points as AI concerns run deeper, with shares in Taiwan plunging sharply on Wednesday morning as major technology equities faced intense selling pressure amid mounting uncertainties surrounding returns on artificial intelligence investments, according to a news report by Focus Taiwan.

The broad market drop saw the Taiwan Stock Exchange's benchmark index breach a key psychological barrier during morning trade. As of 11:53 a.m., local time, the Taiex had fallen by 1,830.55 points, or 4.40 per cent, to stand at 39,772.81. During the same period, the bellwether electronics index experienced a steep decline of 5.08 per cent. The morning slump represents the first instance since April 30 that the Taiex traded below the 40,000-point threshold.

Sell-off Gains Momentum

The sell-off was fueled by growing anxiety among market participants over whether massive spending on technology infrastructure will yield expected commercial returns. Dealers said concerns were running deeper that massive AI investments will not generate satisfactory revenue, prompting investors to trim their holdings of electronic stocks after the Philadelphia Semiconductor Index fell 4.49 per cent overnight. The market weakness on Wednesday morning built upon significant momentum losses sustained during the preceding trading session. Wednesday's plunge followed a drop of more than 2,000 points in the Taiex on Tuesday. The index had previously traded at much higher levels, having closed at 47,018.99 on July 1.

Heavyweight Equities Lead Decline

As per the news report, heavyweight semiconductor equities led the downturn across the Taiwan board during the morning session. Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 per cent of total market value, had fallen 3.29 per cent to NT$2,205.00 (USD 67.85) as of 11:53 a.m. The downward movement in TSMC exerted substantial pressure on the broader benchmark. The single stock's losses contributed about 520 points to the total decline in the Taiex.

Broader technology sub-sectors also recorded heavy selling, with memory chip suppliers continuing to suffer. Shares of Nanya Technology Corp. tumbled 10 per cent, reaching the maximum daily allowable decline, to hit NT$353.50 (USD 11.67) as local market sentiment remained subdued across semiconductor components. (ANI)

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