Has Taiwan's Stock 'Retreat Wave' Ended? Three Major Institutions Buy Simultaneously; Experts Reveal Entry Strategy: Potential Challenge to Previous High

Weaker-than-expected U.S. July non-farm employment data cooled market expectations of Fed rate hikes, prompting capital to flow back into technology stocks. U.S. markets surged, lifting Taiwan stocks, which closed up 702 points at 44,928.

Chen Chong-ming, a financial writer known as the 'Invincible Guru,' analyzed that today's synchronized buying by the three major institutional investors—especially the aggressive foreign fund repurchases—indicates a shift in market positioning from 'retreat' to 'redeployment'.

In a Facebook post, Chen noted that the biggest signal today wasn't just the index rise, but the return of capital to high-growth tech and AI supply chain stocks. TSMC rose as high as NT$2,410 (up NT$40) during the session, though gains narrowed by close, ending up NT$10 at NT$2,380. MediaTek rose NT$60, and Delta Electronics surged to an upper limit-up.

Chen added that market rumors suggest TSMC intends to acquire AUO's Zhongke facility to expand advanced packaging capacity, driving AUO and Innolux to limit-up. 'This shows capital is spreading beyond pure AI large-cap stocks into advanced packaging, panels, memory, and AI hardware supply chains,' he said.

Chen emphasized that institutional investor positioning was today's most important positive signal. All three major institutions bought simultaneously, net buying a total of NT$73.167 billion. Foreign and mainland Chinese investors led with a massive NT$51.715 billion net buy, ending their previously conservative stance. Investment trusts bought NT$2.984 billion, and proprietary traders bought NT$18.468 billion.

Foreign investors' top buys included China Steel, Innolux, and Huatech, indicating today's capital inflow wasn't limited to large tech caps but showed a diversified pattern across electronics, traditional industries, and panel stocks.

Chen noted that after the sharp late-July decline, Taiwan stocks staged a rapid V-shaped rebound in early August. Today's aggressive foreign fund repurchase further confirms the shift from 'retreat' to 'redeployment'. However, the index still lags behind the previous peak, and continued foreign buying and sustained healthy trading volume will be key going forward.

Overall, Chen said today's market showed 'strong index rebound, foreign fund return, tech recovery, and sector diversification.' If foreign funds continue repurchasing and TSMC and AI large-caps regain strength, the broader market could extend its rebound and challenge the previous high. 'Investors should avoid chasing prices after a single-day surge,' he advised, instead focusing on quality companies with solid AI fundamentals, advanced packaging, semiconductors, and consistent institutional backing, entering in stages during pullbacks.