TAIEX plunges 4.65% as August futures volume jumps to 81,004 contracts

Taiwan equities deepened their sell-off on July 29 after the previous session's 2,030.83-point collapse, with the TAIEX opening at 41,491.48, rising as high as 41,698.39 and then plunging to an intraday low of 39,384.85 before closing at 40,039.18, down 1,564.18 points. Turnover reached NT$1.08 trillion, or about $33.5 billion, while the non-financial sub-index fell 1,491.51 points, more than 3%. The latest drop left the benchmark nearly 8,000 points below its recent historic high of around 48,000 in just over a month, amplifying pressure on investors who chased the rally with margin trading, personal loans and other leveraged positions. Market attention has also turned to whether Taiwan's National Stabilization Fund may step in if losses persist. Retail reaction reflected a split between those who saw the decline as a normal correction after a rapid ascent and those who warned of a long-liquidation spiral if 40,000 failed to hold, with some investors pointing to 38,000 as the next level to watch. Financial expert Li Qizhan said investors should focus less on trying to call the bottom and more on re-evaluating strategy, arguing that the long-term AI trend remains intact but the return on investment for AI spending is still highly uncertain. He said the market may be pricing in a mix of risks, including the possibility of an unexpected U.S. interest rate hike, changes in the U.S.-Iran situation, earnings-related churn and deleveraging of Asian capital. The futures market had already signaled acute stress in the prior session, when August TAIEX futures volume surged to 81,004 contracts and the contract closed at a slight premium to spot. Together, the back-to-back losses have underscored how quickly sentiment can reverse after a sharp run-up and how leverage can intensify liquidation once key psychological levels break.