ima_daily5min

Taiwan stocks plunged 6% in a week, with strong risk aversion in the technology sector, huge outflows of foreign capital, and TSMC’s optimistic guidance being ignored (Goldman Sach

2026-07-19·ima-daily5min-0719-19-36b90cf1c3

Street Signal | Taiwan stocks plunged 6% in a week, with strong risk aversion in the technology sector, huge outflows of foreign capital, and TSMC’s optimistic guidance being ignored (Goldman Sach

A Goldman Sachs report shows that despite TSMC's stronger performance guidance, the Taiwan Weighted Index (TAIEX) still fell 6% due to risk aversion in the technology sector, with foreign capital outflows of US$8 billion in a single week and US$32 billion in a single month.

The market performance was that the energy and telecommunications sectors led the gains, while the technology sector led the declines. In terms of institutional holdings, although hedge fund risk appetite increased, net flows were negative, and mutual funds reduced Taiwan allocations.

The report pointed out that EPS is expected to increase by 3.5% in 2027, but the valuation is at a relatively high level, and there is a potential for a rebound in TSMC's ADR premium.

The market has expected a correction in global technology stocks, but such a sharp decline in the Taiwan market and the speed of foreign capital outflows are still beyond expectations, forming a typical pattern of "strong fundamentals but extremely pessimistic funding".

One-sentence conclusion: Taiwan's stock market is experiencing an irrational decline driven by sentiment and capital. Leading stocks with strong fundamentals such as TSMC have been wrongly sold, providing long-term investors with a rare opportunity to intervene.

Positive/negative: It is negative for the Taiwan stock market in the short term, but it is positive for stocks with strong fundamentals such as TSMC in the medium and long term because they are undervalued. Market pessimism has fully priced in, but financial pressure still needs to be released. Catalysts:

1) When will foreign capital outflow slow down or reverse;

2) TSMC’s revenue data for subsequent months;

3) When will global technology stock sentiment stabilize, especially the trend of AI-related sectors.

Full text

Taiwan stocks plunged 6% in a week, with strong risk aversion in the technology sector, huge outflows of foreign capital, and TSMC’s optimistic guidance being ignored (Goldman Sach

A Goldman Sachs report shows that despite TSMC's stronger performance guidance, the Taiwan Weighted Index (TAIEX) still fell 6% due to risk aversion in the technology sector, with foreign capital outflows of US$8 billion in a single week and US$32 billion in a single month. The market performance was that the energy and telecommunications sectors led the gains, while the technology sector led the declines. In terms of institutional holdings, although hedge fund risk appetite increased, net flows were negative, and mutual funds reduced Taiwan allocations. The report pointed out that EPS is expected to increase by 3.5% in 2027, but the valuation is at a relatively high level, and there is a potential for a rebound in TSMC's ADR premium. The market has expected a correction in global technology stocks, but such a sharp decline in the Taiwan market and the speed of foreign capital outflows are still beyond expectations, forming a typical pattern of "strong fundamentals but extremely pessimistic funding". One-sentence conclusion: Taiwan's stock market is experiencing an irrational decline driven by sentiment and capital. Leading stocks with strong fundamentals such as TSMC have been wrongly sold, providing long-term investors with a rare opportunity to intervene. Positive/negative: It is negative for the Taiwan stock market in the short term, but it is positive for stocks with strong fundamentals such as TSMC in the medium and long term because they are undervalued. Market pessimism has fully priced in, but financial pressure still needs to be released. Catalysts: 1) When will foreign capital outflow slow down or reverse; 2) TSMC’s revenue data for subsequent months; 3) When will global technology stock sentiment stabilize, especially the trend of AI-related sectors.

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