Record Fall in TAIEX Amid AI Future Fears
Taiwan's stock exchange has fallen a record 1,800 points, just shy of the 10% daily stop limit. The drop comes as global markets suffer amid growing concerns over the profitability of AI and increasing geopolitical tensions.
Category
🗞
NewsTranscript
00:00Stocks are plummeting in Taiwan's financial markets following a shaky week in Wall Street
00:05amid geopolitical tensions and waning confidence in AI.
00:09Rhys Ayres is live for us at the Taiwan Stock Exchange with more on the recent market fluctuations.
00:14Rhys, what's driving this crash?
00:17Oh, well, Eric, here in Taipei, the markets just closed about 30 minutes ago.
00:22You can see a lot of green behind me, which might look good, but actually green in Taiwan
00:26means down and red means up, so a bad day for investors.
00:31Taiwan's actually seeing a record loss today, over 1,800 points.
00:37That's almost at the 10% daily limit of the stop limit with Foxconn and TSMC, two of Taiwan's
00:43biggest companies, both in the tech sphere, actually hitting that 10% daily limit.
00:48It's been a rough week in Taiwan and abroad as investors are in panic mode, selling off
00:53stocks across markets, and Taiwan's Stock Exchange, or TAIX, is particularly sensitive
00:59to movements in the tech sphere and to how the US market performs.
01:04If we take a look at the last couple of months in Taiwan, it's been a bit of a roller coaster.
01:09So here at the beginning of August, we've seen this recent massive drop-off due to fears
01:13about the AI industry.
01:15A bit more on that in a moment, but earlier in June, there was actually the opposite as
01:19there was more confidence in tech and AI, a lot more foreign investment coming into
01:24Taiwan.
01:25It hosted Computex, which was a computer expo.
01:28There was a slight drop-off later on as Joe Biden exits the presidential race, but then
01:32it spikes again as Taiwan's TSMC, who produces chips, semiconductors, reports its earnings
01:39and its stock prices go up.
01:41Another drop later on in July as Typhoon Kami hits Taiwan, and now this massive drop-off
01:47over fears in the AI industry.
01:50Now, that's one of the big reasons why we're seeing this crash, not just in Taiwan, but
01:55across the world.
01:57There's falling confidence in tech, particularly as people begin to question the profitability
02:03of AI.
02:05And the US tech prices are falling, and that has a direct impact on the Taiwanese market
02:10as the producer of most of the world's most powerful semiconductors or chips.
02:16So, less faith in tech and AI means maybe less demand for Taiwanese tech.
02:24And when tech prices fall, the entire Taiwanese stock market feels the effects.
02:29Now, there's also global instability with increasing tensions in the Middle East and
02:34ongoing conflict in Ukraine.
02:37We've got political instability.
02:39We've got uncertainty over the US elections coming up in November.
02:43All of these contributing to a shaky global market.
02:48Now, Taiwan's market saw the steepest fall off in Asia, but other markets in the continent
02:54also feeling the effects, including in Japan and in India.
02:58Though, as Asia's best performing market so far this year, there are hopes that the Taiwanese
03:04market could stabilize relatively quickly.
03:07Though, now with the US market opening later on today, that could dictate global markets
03:15in the coming weeks.