Taiex Falls 1.1 Percent to 46,293 as Foreign Investors Sell Before Futures Settlement

Taiwan's Taiex closed at 46,293 points on Tuesday, October 20, down 529 points, or 1.1 percent, Focus Taiwan reported. The index opened at 46,713 points and traded between 46,163 and 46,968 points. It rose above Monday's close in the morning, then selling spread across the market and pushed it near the low for the day.

Taiwan Semiconductor Manufacturing Co. fell 0.6 percent to TWD 2,405. TSMC is the largest stock in the index, so its move carries heavy weight. Hon Hai Precision Industry rose 0.8 percent. MediaTek fell 1.3 percent and Delta Electronics fell 2.1 percent. Financial stocks fell 2.4 percent as a group, and electronic technology stocks fell 1.0 percent. Fubon Financial Holding lost 3.2 percent and Cathay Financial Holding lost 3.9 percent.

Foreign selling before settlement

Foreign institutions sold a net TWD 79.54 billion of Taiwan shares on the main board, Focus Taiwan reported. Net foreign selling in October reached TWD 662.07 billion. Foreign investors also held about 92,000 more short futures contracts than long contracts, which added pressure before the settlement of October index futures on Wednesday, October 21. After Tuesday's close, Taiex futures were down 19 points at 46,322.

Chip worries spread across Asia

Selling in Taiwan followed weakness in South Korean memory chip stocks and wider doubts about artificial intelligence spending. The Wall Street Journal reported that Asian stocks fell on Tuesday even though United States chip stocks had rebounded on Monday. South Korea's SK Hynix fell 5.3 percent and Samsung Electronics fell 3.8 percent. Japan's Kioxia Holdings fell 3.2 percent. South Korea's Kospi fell 4.3 percent, Japan's Nikkei fell 1.4 percent, Hong Kong's Hang Seng fell 1.2 percent and China's Shanghai Composite fell 0.6 percent.

The Journal said investors have grown more selective about AI stocks instead of buying the whole sector as one trade. Eastspring Investments warned that financing the AI buildout is getting harder as high government deficits and tighter monetary policy raise costs. Oil prices also rose on supply disruption worries, which added to the pressure on markets.

Why it matters and what happens next

Taiwan sits at the center of the world chip supply chain. A fall led by chip and financial stocks affects pension funds and small investors in Taiwan and in funds abroad that track the index. The next test comes on Wednesday, when October futures settle and foreign positions reset. Traders will also watch United States tech earnings and results from Asian chip firms for signs that AI demand still supports the high cost of building data centers.