Taiwan's benchmark Taiex index closed below 40,000 points on Thursday as weak market momentum continued [1].
The decline reflects growing anxiety among investors regarding the sustainability of high-cost artificial intelligence investments and the shifting competitive landscape in Asia. Because the Taiex is heavily weighted toward semiconductor and technology firms, its volatility often signals broader trends in the global tech supply chain.
Trading began with a slight recovery, showing some early resilience before the index retreated [1]. This brief rally was not enough to sustain the index above the critical 40,000-point threshold [1].
Market sentiment was primarily dampened by concerns over rising capital spending related to AI [1]. Investors are increasingly questioning the immediate returns on these massive expenditures, a trend that has created headwinds for several tech-heavy markets recently.
Adding to the pressure is the growing competition from China [1]. As Chinese firms attempt to scale their own domestic semiconductor and AI capabilities, the competitive edge of Taiwanese firms faces new scrutiny from global shareholders.
Analysts said that the persistence of weak momentum suggests a lack of conviction among buyers at current valuation levels [1]. The inability to hold the 40,000-point mark indicates a psychological shift in the market, where previous support levels are no longer holding firm against macroeconomic headwinds.
Despite the closing dip, the early-trade activity showed that some sectors still possess appetite for growth, though these gains were erased by the end of the session [1].
“The Taiex index closed below 40,000 points on Thursday”
The slip below 40,000 points suggests that the 'AI euphoria' is being replaced by a more cautious valuation phase. Investors are no longer buying on potential alone but are now demanding proof of profitability to justify the high capital expenditures required for AI infrastructure. Furthermore, the mention of Chinese competition highlights a geopolitical risk premium that continues to affect Taiwanese equities.
