Preface

The Taiwan stock market experienced significant volatility at the start of September, marked by a sharp decline as institutional investors offloaded massive shares. The market showed a downturn of 161.37 points, or 0.37%, closing at 24,071.73 points, falling below the moving average line. Despite this selling pressure amounting to NT$216.22 billion, foreign investors surprisingly purchased a significant number of shares, especially in **Foxconn** and **Zhen Ding Technology**, each exceeding 10,000 shares.

Lazy bag

Key Highlights: The day witnessed a major sell-off by institutional investors, selling NT$216.22 billion collectively. However, foreign investors focused on buying large quantities of Foxconn and Zhen Ding Technology, demonstrating selective confidence in these companies amidst market downturn.

Main Body

On the first trading day of September, the Taiwan stock market faced intense selling pressure, especially from institutional investors. The aggregate sale reached a staggering NT$216.22 billion. This sell-off drove the market index down by 161.37 points, a 0.37% drop, closing at 24,071.73, and broke the monthly moving average line. The total trading volume was NT$5090.76 billion.

On this tumultuous day, foreign investors turned their attention to a few select companies, exhibiting particular interest in financial, electronics, and some key manufacturing stocks. They notably bought more than 10,000 shares each of Tai Shin Financial Holdings (2887-TW), Winbond Electronics (2344-TW), InnoLux (3481-TW), alongside tech giants Foxconn (2317-TW) and Zhen Ding Technology (4958-TW).

In terms of market-specific performance, the electronic stock index slumped by 0.83%, which accounted for 74.07% of the day's total trading value, underscoring the sector's dominance. In contrast, financial and insurance stocks saw a modest rise of 0.94%, even as shipping stocks fell by 0.88%.

The breakdown of sellers includes foreign capital with a net sale of NT$78.29 billion, trusts selling NT$29.26 billion, and local dealers offloading NT$108.67 billion. In the futures market, foreign investors' net transaction volumes registered a net short position of 249 contracts, with 26,664 open contracts still in play.

Analyst Huang Han-Cheng highlighted that today's sharp drop in the index reflects patterns seen on August 19 and August 29, characterized by high-volume declines, potentially signaling the formation of a small head-and-shoulders pattern. Whether the market can rebound strongly within three days remains a crucial question. Domestic funds seem to be seeking exit routes, impacting medium to high-priced stocks significantly. Huang advises investors to be cautious and refrain from purchasing individual stocks, as further declines could be on the horizon.

Key Insights Table