The TAIEX posted a record 3,186.45-point gain on July 31 as TSMC and other chip names hit daily limits, but analysts and institutions remain divided over whether the surge marks a durable turn or a bear-market bounce.
Taiwan's markets staged a historic rebound on July 31 after several days of steep losses, with the TAIEX weighted index jumping 3,186.45 points, or 7.98%, to 43,119.75 on turnover of NT$833.71 billion. August TAIEX futures climbed 3,392 points to 43,678, leaving the front-month contract at a 558.25-point premium to spot, while heavyweight technology shares led a broad recovery. TSMC hit its daily price limit for the first time in 15 months, rising NT$220 to NT$2,425 and contributing roughly 1,746 points to the index. Its market capitalization increased by NT$5.7 trillion to NT$62.89 trillion. MediaTek also hit limit-up at NT$3,555, and 113 listed companies finished at their daily limits, including Chenbro, Wiwynn, Nan Ya PCB, Nanya Technology and Winbond Electronics. ETFs surged as well, with the Yuanta Taiwan Top 50 ETF rising 10% to NT$102.85 and the leveraged Yuanta Taiwan Top 50 2x ETF jumping 18.75%. Institutional flows reversed strongly. The three major institutional investor groups were net buyers of NT$84.68 billion, including NT$67.55 billion from foreign and mainland Chinese investors, the 10th largest such daily net buying on record. Investment trusts net bought NT$33.38 billion, while proprietary dealers net sold NT$16.26 billion. At the same time, Capital Futures said foreign investors' net short futures positions increased to 82,515 contracts, suggesting caution persisted in derivatives even as spot buying returned. The scale of the rebound has split market opinion. Some analysts argue shrinking turnover from roughly NT$1.6 trillion in late June to around NT$800 billion points to a classic bottoming pattern and see room for the TAIEX to consolidate between 42,000 and 46,000 in the third quarter before a possible new uptrend. Others warn that outsized rebounds of this kind are typical of bear markets and say the latest surge may be an escape rally rather than confirmation of a durable recovery. Near-term focus has shifted to whether trading volume expands further, whether TSMC consolidates instead of driving the index alone, and whether the market can hold around key monthly and quarterly moving averages.