The selloff came despite a Wall Street rally to record highs on hopes of easing US-Iran tensions, underscoring persistent geopolitical and stock-specific pressure on Taiwan equities.
Taiwan stocks fell sharply in early Monday trading, with the Taiex sliding nearly 500 points and testing 42,895.81 after opening at 43,092.49, down 293.92 points. The decline was led by Taiwan Semiconductor Manufacturing Co. (TSMC, 2330), which opened at NT$2,335 and dropped to an intraday low of NT$2,315, down NT$55, or 2.32%. ASE Technology Holding (3711), Hon Hai Precision Industry (2317), and other electronics names also weakened, while semiconductor, AI, silicon intellectual property, and low-earth-orbit satellite stocks all came under pressure. Financial and traditional industrial shares were also soft. The retreat contrasted with Friday's gains on Wall Street, where hopes for easing tensions between the United States and Iran lifted all four major US indexes. President Donald Trump said US-Iran negotiations were underway, helping sentiment even though Tehran denied it. The Dow Jones Industrial Average rose 693.38 points, or 1.32%, to a record 53,178.41, while the S&P 500 gained 1.48%, the Nasdaq advanced 2.13%, and the Philadelphia Semiconductor Index climbed 1.05%. Nvidia rose 2.93% and TSMC's US-listed ADRs added 0.44%. Kuo Ching-wei, an assistant manager at Cathay Futures & Securities Consulting, said TSMC's recent swings reflect positioning changes rather than any deterioration in fundamentals. He described the latest weakness as a normal short-term pullback after exuberant trading last week, but warned that geopolitical risks remain unresolved and investors should keep sufficient cash and avoid chasing sharp rallies or limit-up moves. He said pullbacks and consolidation in the index or quality stocks may offer better bargain-hunting opportunities. Friday's session highlighted the market's volatility. The Taiex opened down more than 300 points but reversed to an intraday high of 43,784.19 before ending up 266.66 points, or 0.62%, at 43,386.41 on turnover of NT$844.5 billion (approximately $26.1 billion). TSMC closed down NT$55, or 2.27%, at NT$2,370, while MediaTek (2454) jumped NT$355 to its daily limit-up at NT$3,910 and ASE Technology Holding also finished at limit-up. Institutional analysts said funds have been rotating quickly between heavyweight shares and small- and mid-cap names, widening divergence in market structure. They added that while progress in US-Iran talks offered a short-term catalyst, investors should watch international developments, upcoming corporate earnings, and key economic data as the market battles around the 43,000-point level.