Focus Stock) Taiwan Stocks Fall Below 42,000 Points, 'Fourth Institution' Buys 0050 with Transaction Value Exceeding 300 Billion

South Korean stock market sees another circuit breaker! Following the decline of SK Hynix ADR the previous night, Asian stocks plummeted across the board on the 28th. Taiwan's stock market was under heavy selling pressure, with the weighted stock price index falling below 42,000 points. However, market funds identified it as an overreaction, and the 'fourth institution' resumed buying. The transaction amount of Yuan Great Taiwan 50 (0050-TW) before noon exceeded 300 billion, becoming the focus of buying orders for funds.

Institutions pointed out that the epicenter of this wave was SK Hynix and Samsung Electronics, which once accounted for over 60% of the KOSPI market value. After speculative funds pushed up the stock prices in a short period, a sharp correction occurred. The correlation between KOSPI and Nikkei 225 and the weighted stock price index reached 0.6 to 0.7, and high linkage made it difficult for Japanese and Taiwanese stocks to stabilize, leading to an overreaction deviating from the fundamentals.

However, unlike the South Korean stock market, Taiwan Semiconductor Manufacturing Company, the largest market capitalization stock in Taiwan, accounts for over 40% of the market, but its P/E ratio has not changed significantly under a stable equity structure. Moreover, the continuous release of positive business outlook in earnings calls will continue to support market confidence and play a stabilizing role.

Statistics show that since July, KOSPI has fallen by 22%, Nikkei 225 by 7.3%, and the weighted stock price index by 5.4%.

The overreaction and strong fundamentals continue to drive funds to buy, and on the 24th, Taiwan's stock market was led by the two market capitalization giants 0050 and 00631L in ETF trading volume. Statistics show that since July, the average daily trading volume of 0050 and 00631L has reached 141.8 billion and 101.7 billion respectively, the only two to break 100 billion, with the low-interface momentum obviously concentrated.

Statistics from July 1 to July 28, 19 trading days, 0050 had 10 days with trading volume exceeding 100 billion, and on July 17, it set a new high of 528 billion since listing; in terms of actual funds entering the market, 0050 had a net subscription of 4,529 billion in the first half of the year, and another net subscription of 1,026 billion in July, making it the third time this year that a single month's net subscription has exceeded 1,000 billion.

Institutions believe that when the market panics, the fourth institution buys 0050 at low prices and buys large-cap stocks in a disciplined manner, which has become the driving force for Taiwan's stock market to stabilize and is expected to become the best tool for the next rebound.

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