Taipei Stocks: TAIEX, TSMC and Foreign Flows — 2026-09-05
Taiwan's foreign exchange reserves returned to the US$600 billion mark in August as the central bank intervened to support the Taiwan dollar, while the TAIEX experienced significant volatility this week. The index surged over 800 points on September 1 driven by strong foreign buying and MSCI adjustments, but faced sharp reversals on September 2 and 3 due to Middle East geopolitical tensions and profit-taking in small and mid-cap stocks.
Taipei Stocks: TAIEX, TSMC and Foreign Flows — 2026-09-05
Top developments
Forex Reserves Hit US$600 Billion on Central Bank Intervention
On September 5, it was reported that Taiwan's foreign exchange reserves rose from the previous month, returning to the US$600 billion mark at the end of August. This increase occurred as the Central Bank of the Republic of China (CBC) actively entered the forex market to prevent the U.S. dollar from falling further against the Taiwan dollar, indicating a strategy to manage currency appreciation pressures amid strong capital inflows.
TAIEX Surges 1.61% on September 4
The Taiwan Weighted Index closed higher by 1.61% on September 4, marking a strong recovery after previous days' volatility. This gain was supported by a rebound in large-cap tech stocks, reflecting investor confidence returning to the semiconductor sector despite earlier global headwinds.
Sharp Reversal on September 3: Small-Caps Lead Decline
On September 3, the TAIEX opened higher but reversed course, closing down 307 points and losing the 46,000 level. The index initially surged more than 350 points to touch 46,517 in early trading before selling pressure emerged, particularly affecting small and mid-cap stocks which bore the brunt of the correction.
Middle East Tensions Trigger Plunge on September 2
Shares fell sharply on Wednesday, September 2, as a spike in international crude oil prices amid renewed United States attacks on Iran heightened fears of inflationary pressures. Dealers noted that the geopolitical risk-off sentiment weighed heavily on the tech-heavy index, reversing gains made earlier in the week.
Massive Inflow Ahead of MSCI Review on September 1
On September 1, the TAIEX surged over 800 points, driven by bargain hunting ahead of an increase in the local market's weighting under the latest MSCI regular index review. Foreign investors bought NT$26.7 billion (approx. US$850 million), while total institutional net buying reached NT$56.1 billion, signaling strong confidence in the market's valuation relative to global peers.
Local view
Local media highlighted the divergent performance between large-cap tech leaders and smaller stocks. ETtoday reported that while the index rose significantly on September 1, with TSMC gaining NT$10 to close at NT$2,420, many individual stocks failed to keep pace with the index's rally. TechNews noted that foreign investors concentrated their buying on wafer foundries like TSMC and UMC, totaling NT$41.7 billion on August 28, reflecting a strategic focus on AI-driven semiconductor demand despite broader market concerns.
Context & numbers
- Forex Reserves: Returned to US$600 billion at the end of August.
- September 4 Close: Taiwan Weighted Index up 1.61%.
- September 3 Close: Down 307 points; failed to hold 46,000 level.
- September 1 Flow: Institutional investors net bought NT$56.1 billion; Foreigners bought NT$26.7 billion.
- TSMC Price: Closed at NT$2,420 on August 28; saw volatility throughout the week.
On the radar
- Middle East Geopolitics: Continued monitoring of oil price spikes and their impact on inflation expectations and tech stock valuations.
- MSCI Adjustments: Follow-through effects of the recent MSCI rebalancing on foreign institutional flows in the coming weeks.
- Central Bank Actions: Further intervention in the forex market if the Taiwan dollar strengthens excessively against the USD.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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