Taiwan Stocks Open High but Close Low with Over 1,000-Point Volatility; Can TSMC Hold? Institutional Investors Buy NT$501 Million, Foreign Investors Cover Futures Short Positions

Taiwan stocks (20th) opened high but closed low, with TSMC, the market leader, unable to single-handedly support the market. The index swung over 1,000 points intraday, closing down 221.57 points at 42,449.7 on shrinking volume. The three major institutional investors collectively bought NT$501 million.

Last week, global AI and semiconductor stocks faced a wave of panic selling, with the Philadelphia Semiconductor Index plunging about 11% in a week. Taiwan's stock market recorded its largest single-day point drop in history, raising investor concerns about whether the AI boom is cooling down.

Observing today’s market highlights, TSMC was the main support, but passive components, memory, ABF substrates, and mature process-related stocks still faced heavy selling pressure.

Institutional analysts suggest that with short-term volatility increasing and market positioning not yet fully settled, Taiwan stocks are expected to remain in a volatile phase. Investors should strictly control overall leverage and avoid blindly catching bottoms during fluctuations. Going forward, close attention must be paid to foreign investors’ spot market moves and whether the broader market can generate a strong, high-volume green candlestick as a concrete sign of stabilization—only then can market risk appetite be restored.

Post-market data shows the three major institutions collectively bought NT$501 million, with foreign investors selling NT$608.3 million, proprietary traders selling NT$806.4 million, and investment trusts buying NT$1,464.8 million.

Looking at Taiwan Index Futures net positions, foreign investors reduced their net short positions by 7,852 contracts, leaving 78,337 contracts. Among the top ten traders, the net short position of institutional investors for the full-month Taiwan Index Futures decreased by 3,230 contracts, leaving 555 contracts.

For options open interest, the highest open interest for August calls was at 42,000 points, and for puts at 37,200 points. For July Week 4, the highest call open interest was at 46,000 points, and puts at 40,200 points. The full-month put/call ratio dropped from 0.93 to 0.83. Foreign investors’ net amount for Taiwan Index call options was -NT$79 million, and for put options, +NT$167 million.