Taiwan’s listed market capitalization fell by NT$7.1 trillion during the week through October 16, the Taiwan Stock Exchange said, marking the second-steepest weekly point decline in index history after July’s rout. The wipeout landed even as the TAIEX clawed back 141 points on Friday to finish at 47,111.26, a reminder that headline rebounds can mask how much wealth left the market when offshore funds rushed for the door.
How the week unfolded
Foreign portfolio managers sold a record NT$5,862.2 billion of Taiwan shares during the five sessions, exchange data compiled by local media show, extending a year-to-date exit that already approached NT$2 trillion before the week began. The selling concentrated in Taiwan Semiconductor Manufacturing Co., which alone accounted for NT$535.6 billion of Friday’s foreign outflow even as the broader tape stabilized.
Domestic institutions tried to catch the falling knife. Government-linked banks and insurers bought NT$156.9 billion on Friday, while investment trusts added NT$110.4 billion for a sixth straight day of net purchases. Retail investors followed trusts into smaller-cap rebound names, but the scale still left the three major investor groups net sellers by NT$685.1 billion on the session.
What boards are watching
CFOs at export-heavy manufacturers said the weekly damage shows up in employee stock bonus valuations and planned buyback math long before it hits reported earnings. Several electronics suppliers told investors on post-close calls that they will delay treasury share programs until volatility subsides, even though balance sheets remain cash-rich.
Credit officers at Taipei banks noted that collateral haircuts on pledged shares tightened automatically when the index breached the 48,000 handle earlier in the week. That mechanical deleveraging amplified afternoon sell programs from wealth-management clients who borrow against portfolios.
Friday’s partial reset
Friday’s 0.3 percent gain came on turnover of NT$935.96 billion, roughly NT$380 billion lighter than the panic session that preceded it. MediaTek and Hon Hai Precision led the comeback, while printed-circuit-board makers hit daily limits on AI demand narratives. TSMC’s NT$20 decline to NT$2,420 capped the rally, illustrating how a single ADR-sensitive heavyweight can mute an otherwise broad risk-on afternoon.
Derivatives desks pointed to a decline in foreign net short positions on Taiwan futures to 93,675 contracts, down 3,907 from the prior day, as evidence that some macro funds covered hedges even while cash equities continued to leak.
Calendar risks into October
Company spokespeople said they are watching U.S. inflation prints and dollar funding costs more closely than local election rhetoric for now, but Legislative Yuan fights over consumer cash payouts could still sway domestic sentiment if bond markets price wider deficits. The Cabinet’s NT$10,000 handout proposal remains tied to the fiscal 2027 budget timetable, while opposition lawmakers push a NT$20,000 special act on a faster track.
For issuers, the practical lesson from the NT$7.1 trillion drawdown is that Taiwan’s market still moves on foreign flow first and fundamentals second during global risk-off weeks. Until offshore selling slows, domestic dip-buying may keep the index above 47,000 without restoring the market caps boards thought they had locked in at the summer peak.