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Taiwan Stocks Plunge Over 1,000 Points; Analysts Warn of Continued Downside Risk

Electronic Technology · Semiconductors · economic_daily · 2026-11-04

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Taiwan stocks faced a sharp sell-off on the 4th, dropping over 1,000 points as analysts warn that high margin debt and foreign selling pressure persist.

What Happened

Market Sell-off: The Taiwan stock market experienced a significant decline on the 4th, opening higher before plummeting over 1,000 points to break below the 42,000-point level. Despite a positive lead from U.S. tech stocks, local heavyweight stocks failed to sustain momentum, leading to a broad-based market retreat.

Margin Debt Concerns: Analysts highlight that the reduction in margin debt has not kept pace with the index's decline, suggesting that retail leverage remains elevated. This imbalance in market positioning indicates that the correction phase is likely still ongoing, with further downside risks remaining.

Key Stabilization Indicators: Market experts emphasize that stabilization will depend on three critical factors: a significant decrease in margin debt, a slowdown in foreign institutional selling, and the stability of the New Taiwan Dollar. These indicators are essential for determining when the market might find a sustainable floor.

Conservative Outlook: Given the uncertainty surrounding U.S. political developments and weak electronic futures, analysts advise investors to avoid bottom-fishing. A conservative approach focusing on strict risk management is recommended until clearer signs of market stabilization emerge.

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