Taiwan Stock Weekly: Heavy Loss Breaches Monthly Line; Focus on AI Correction Momentum
Quarter-end settlement creates cautious atmosphere; corporate profits support medium-term outlook
Reporter Chen Xin, June 29, 2026
Last week, the TAIEX fluctuated downward, closing at 44,571.76 points, down 1,893.44 points for the week, a decline of 4.07%, marking a black weekly candle. Under the dual pressure of international panic sentiment and profit-taking sell-offs, the market suffered a heavy pullback and lost the monthly moving average. Looking ahead to this week, with mid-year and quarter-end settlements approaching, market sentiment is cautious. Close attention must be paid to the valuation correction momentum of AI concept stocks and whether key indicators such as TSMC (the heavyweight king) can stabilize at critical support levels.
In terms of positions, the three major institutional investors heavily withdrew from the centralized market last week, with a net sell-off of NT$424.508 billion. Among them, foreign investors were the main cash-out culprits, with cumulative net selling of NT$331.2 billion in a single week; securities dealers also heavily sold, reducing positions by NT$119.102 billion; only investment trust institutions continued to buy on dips, with net purchases of NT$27.538 billion.
Regarding foreign investor sell-offs last week, panel makers and large-cap weighted stocks were the hardest hit. The most heavily sold stock was Innolux, with cumulative net selling of 300,000 lots; Yuanta Taiwan 50 (0050) and Winbond Electronics ranked second and third, with sell-offs exceeding 200,000 lots each. In addition, active ETFs, Mega Financial Holding, and electronics heavyweight Hon Hai also faced significant selling pressure.
As for the foreign investor buy ranking, amid market panic, capital clearly rotated toward high-yield bond ETFs and defensive groups. The top two buys were Taishin US Corporate A+ Bond 20+ (00942B) and Capital ESG Investment Grade Bond 20+ (00937B); while airline duo China Airlines and Eva Air, semiconductor testing giant KYEC, financial stock Taiwan Business Bank, and traditional industry leader Formosa Plastics were most favored, becoming safe havens for foreign capital.
Analyzing the recent market, Xiao Huizhong, manager of Allianz Taiwan Fund, said that the fundamentals of the Taiwan stock market have not turned around; there is no issue of inventory accumulation, and many manufacturers have zero inventory with no sudden freeze in demand. Corporate profits have not been revised downward. In fact, tech giants continue their arms race, and AI demand momentum remains strong. With continuous specification upgrades and the expansion of new applications and technologies, orders and revenue momentum for related supply chains in Taiwan are robust.
Xiao further pointed out that examining recent performance of the Taiwan stock market compared to international and neighboring markets reveals that themes or groups that have secured key components and raw material dividends are experiencing rotational gains and relatively strong trends. Corporate profits provide solid support, and the medium- to long-term trend remains unchanged. However, the Taiwan stock market is indeed under pressure from gains consolidation. The correction is mainly driven by technical and position adjustments, not a fundamental reversal. It is expected that the market will maintain a wide-ranging consolidation pattern in the near term.
