Taipei Stocks: TAIEX, TSMC and Foreign Flows — 2026-09-02
The TAIEX experienced significant volatility this week, surging to a two-month high on Nvidia-MediaTek news before plunging due to Middle East geopolitical tensions. Foreign investors aggressively bought back into the market, with net inflows exceeding NT$50 billion on key days, while the Taiwan dollar strengthened to a two-month high. Meanwhile, the Taiwan Stock Exchange Chairman is actively promoting a diversification narrative to reduce the market's heavy reliance on TSMC.
Taipei Stocks: TAIEX, TSMC and Foreign Flows — 2026-09-02
Top developments
TAIEX Plunges on Middle East Geopolitical Tensions
On September 2, 2026, the TAIEX fell sharply as international crude oil prices spiked amid renewed United States attacks on Iran. Dealers reported that heightened fears of inflationary pressures drove investors away from risk assets. This drop came just one day after a significant rally, highlighting the market's sensitivity to global geopolitical shocks.
Nvidia-MediaTek Deal Drives Two-Month High
On September 1, 2026, the TAIEX soared to its highest closing level in two months, gaining over 800 points. The surge was primarily driven by investor enthusiasm following Nvidia Corp's plan to invest in MediaTek Inc., which lifted semiconductor stocks across the board. The index closed at a strong level, reflecting robust confidence in the AI supply chain.
Foreign Investors Lead Massive Net Buying
Foreign institutional investors returned aggressively to Taiwan stocks ahead of and following Nvidia's earnings release. On August 28, foreign investors bought NT$41.588 billion, contributing to a total three-institutional net buy of NT$46.817 billion. By September 1, foreign investors had bought an additional NT$26.708 billion, pushing the total daily net buy by all three institutional groups to NT$56.139 billion. This sustained inflow underscores strong foreign confidence in the tech-heavy index.
TSE Chairman Pushes for Diversification Beyond TSMC
In an interview published on August 31, 2026, Sherman Lin, head of the Taiwan Stock Exchange, urged investors to look beyond TSMC. With TSMC accounting for approximately 40% of the market's value, Lin emphasized the need to embrace the broader "technology island" narrative. He highlighted that while Taiwan overtook India as the world’s fifth-largest stock market in May, excessive concentration in one stock poses risks.
Local view
Local financial media highlighted the intense volatility and the specific drivers behind the swings. ETtoday Finance reported that the TAIEX rose 356 points on August 28, with TSMC gaining NT$10 to close at NT$2,420. Anue (鉅亨網) noted that on September 1, active ETFs were major beneficiaries of foreign inflows, with seven of the top ten foreign buys being active ETFs. Local analysts pointed out that while TSMC remains the anchor, the rally was broad-based, lifting MediaTek, packaging, testing, and PCB sectors simultaneously.
Context & numbers
- TAIEX Levels: The index hovered around the 45,000–46,000 range throughout the week. It breached 45,000 downward on August 24 but recovered to surpass 46,000 by August 31.
- TSMC Price: TSMC shares traded near record levels, closing at NT$2,420 on August 28 and NT$2,415 on August 26. On September 2, it faced pressure alongside the broader market decline.
- Turnover: Daily turnover volumes were substantial, reaching NT$1.08 trillion on September 1 alone, indicating high liquidity and active participation.
- Currency: The Taiwan dollar closed at 31.818 per US dollar on August 28, marking a more than two-month high, supported by strong equity inflows.
On the radar
- MSCI Adjustments: The MSCI regular index review adjustments took effect around August 31, influencing foreign flows as funds rebalanced to match new weightings.
- Middle East Conflict: Continued developments in US-Iran relations remain a primary risk factor for oil prices and global risk sentiment, directly impacting the tech-heavy TAIEX.
- Nvidia Earnings Aftermath: While the initial reaction was positive, further analysis of Nvidia's supply chain partners (like MediaTek and TSMC) will continue to drive sector-specific moves in the coming days.
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