Taiwan stocks hit record highs; financial sector faces heavy institutional sell-off

Taiwan's stock market demonstrated remarkable strength, with the TAIEX index surging to a record closing high of 41,933 points, buoyed by a stellar performance from semiconductor giant TSMC, which also reached a new peak. This broad market rally saw 1,041 stocks participating in the upward trend, painting a picture of robust investor confidence.

Amidst this market surge, a significant shift occurred in institutional investor activity. Domestic institutional investors (投信) recorded their largest net buying this year, exceeding NT$16 billion. However, their focus was notably selective, with a substantial sell-off concentrated in the financial sector. This sector bore the brunt of the institutional selling, with companies like Shin Kong Financial Holding and Fubon Financial Holding experiencing significant divestment.

Despite the heavy selling pressure on financial stocks from domestic institutions, the market was partially cushioned by strong support from foreign investors. This external backing helped to mitigate the impact, with some of the most heavily sold stocks, such as Shin Kong Financial Holding, still managing to eke out modest gains. The trading data reveals a complex interplay between domestic institutional caution in the financial sector and foreign investor confidence in the broader market, particularly in technology stocks.