Taipei Stocks: TAIEX, TSMC and Foreign Flows — 2026-10-12
The TAIEX closed at a record high of 49,822.55 points on October 7, driven by TSMC's surge to NT$2,575 and massive foreign institutional buying of over NT$70 billion. However, the index pulled back on October 12 as investors adopted a wait-and-see stance ahead of TSMC's Q3 earnings release on October 15. Central bank data revealed a decline in foreign exchange reserves as the bank intervened to support the Taiwan dollar.
Taipei Stocks: TAIEX, TSMC and Foreign Flows — 2026-10-12
Top developments
TAIEX Hits Record High, Then Consolidates
The benchmark TAIEX surged to an all-time closing high of 49,822.55 points on October 7, rising 110.51 points (0.22%) after briefly touching an intraday record of 49,968.92 the previous day. The rally was fueled by a rebound in US tech stocks and strong sentiment around AI-driven semiconductor demand. On October 12, the index opened lower following a dip in TSMC's ADRs but recovered to close slightly lower, holding above the 49,000-point threshold as traders awaited key earnings catalysts.
TSMC Leads Rally Ahead of Q3 Earnings
TSMC shares hit a record close of NT$2,575 on October 5, pushing its market capitalization toward $2.5 trillion, before settling at NT$2,585 later in the week. Analysts attribute the valuation expansion to TSMC’s dominant position in CoWoS advanced packaging, which is considered a critical bottleneck for global AI chip supply. The company is scheduled to report Q3 2026 results on October 15, with consensus forecasts predicting a sixth consecutive record quarterly profit, potentially up 65% year-on-year.
Foreign Institutions Drive Massive Net Buying
Foreign investors were net buyers of NT$71.897 billion on October 5, marking the 12th largest daily net purchase in history and the 9th largest this year. This inflow helped push the TAIEX up 1,236 points in a single session. In addition to TSMC, foreign funds heavily accumulated positions in Delta Electronics and MediaTek, reflecting broad-based confidence in the tech sector's growth outlook.
Central Bank Intervenes as Reserves Decline
Taiwan’s foreign exchange reserves fell by US$1.15 billion to US$600.75 billion as of the end of September 2026, according to the Central Bank. The decline was primarily attributed to the strengthening US dollar and active intervention by the central bank, which sold US dollars to curb excessive depreciation of the New Taiwan dollar. On October 8, the Taiwan dollar weakened by 8.1 cents during midday trading amid dividend payout pressures from TSMC, where foreign holders received approximately NT$181.5 billion in cash dividends.
Local view
Local media outlets like Ettoday and China Times highlighted the psychological significance of the 50,000-point milestone, with analysts noting that while the index came within 31 points of the mark, profit-taking emerged as a natural corrective force. United Daily News (UDN) reported that foreign institutions synchronized their buying across major tech stocks like TSMC and Delta Electronics, signaling a "super cycle" narrative for AI hardware that local investors are eagerly following. Retail sentiment, as reflected on platforms like CMoney, showed cautious optimism, with many traders waiting for TSMC's earnings confirmation before committing further capital.
Context & numbers
- TAIEX Close (Oct 7): 49,822.55 (+110.51 pts, +0.22%)
- TAIEX Intraday High (Oct 6): 49,968.92
- TSMC Close (Oct 5): NT$2,575 (Record High)
- Foreign Net Buy (Oct 5): NT$71.897 billion
- FX Reserves (End Sept 2026): US$600.75 billion (-US$1.15 billion MoM)
- TSMC Q3 Dividend Payout: ~NT$181.5 billion
On the radar
- TSMC Q3 2026 Earnings: Scheduled for October 15, 2026. A strong beat could propel the TAIEX past the 50,000 mark; a miss could trigger significant correction given current valuations.
- US Federal Reserve Policy: Recent weak US jobs data has reduced rate hike expectations, supporting emerging market flows into Taiwan. Further US economic data will be critical for next week's sentiment.
- CoWoS Capacity Updates: Investors are closely watching for any updates on TSMC's advanced packaging capacity expansion during the earnings call, as this is the primary constraint for AI chip shipments.
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