Taiwan Stocks Withdrawn $9.586 Billion by Foreign Investors Last Week; South Korean Market, Despite Two Circuit Breakers, Attracted $145 Million in Capital Inflows

The launch of new AI models in China has triggered market concerns over intensified industry competition, while high-valuation tech stocks faced profit-taking, leading to a broad retreat in the three major U.S. indices. The Philadelphia Semiconductor Index recorded its largest weekly drop in over a year. As a result, Taiwan's stock market weakened today (20), with the main index falling another 221 points. Amid the global equity pullback, market risk appetite has clearly cooled. Notably, despite heavy selling pressure on Taiwan stocks, global capital flows showed significant divergence: South Korea's stock market, despite triggering circuit breakers twice last week due to sharp declines, saw a slight net inflow of foreign capital, contrasting sharply with Taiwan's massive foreign outflow of over $9.586 billion.

Statistics show that equity ETFs globally attracted a net inflow of $682.63 billion over the past week, marking the 16th consecutive week of net inflows, with funds primarily directed toward U.S., Asian, and Chinese markets. Franklin Securities Investment Advisory noted that although semiconductor stocks have recently undergone sharp corrections, the Philadelphia Semiconductor Index has still gained nearly 68% year-to-date. As earnings season unfolds, the market will more rigorously assess whether tech giants' AI investments can translate into tangible revenue and profit growth.

In Asian markets, foreign investor behavior has shown sharp divergence. South Korea's Kospi Index plunged 8.8% last week due to volatile memory stock prices and rising concerns over AI-related capital expenditures. It triggered circuit breakers on both the 13th and 16th, becoming one of the worst-performing markets globally. Yet, foreign investors逆势 net bought $145 million worth of stocks. In contrast, Taiwan stocks suffered a massive net foreign sell-off of $9.586 billion over the same period, underperforming significantly.

Regarding AI prospects, Jonathan Curtis, technology portfolio manager at Franklin Templeton, pointed out that despite macroeconomic uncertainties, corporate investments in AI infrastructure and productivity-enhancing hardware and software remain resilient. Demand from cloud service providers remains very strong, supporting the expansion of the entire AI ecosystem.

Erica Fulgaro, portfolio manager of the Legg Mason Capital Advisors U.S. Large-Cap Growth Fund, further stated that market leadership has shifted to suppliers providing memory and key components for AI data centers. These companies' strong profitability not only helps mitigate the risk of growth stock bubbles but also has the potential to broaden market participation.

Institutional investors recommend that those seeking stable earnings fundamentals should prioritize U.S. and emerging market balanced funds for core holdings. Cash-positioned investors are advised to enter the market through staggered investments or dollar-cost averaging, while cautiously allocating to gold or natural resources sector funds based on individual risk profiles.