Taiwan Stocks Tumble as 00919 ETF Rebalancing Sparks Major Sell-offs

Taiwan's stock market experienced a significant downturn on Thursday, June 4, 2026, shedding 781 points and falling below the 46,000 mark. This drop followed a record high reached just the day before. The decline was primarily driven by major semiconductor companies and AI-related stocks, with the "dual semiconductor giants" leading the sell-off.

Despite the overall market decline, institutional investors, known as "touxin" in Taiwan, continued to be net buyers, with a net purchase of NT$3.89 billion. However, the current period is critical for the 00919 exchange-traded fund (ETF) as it undergoes its rebalancing phase. Eight stocks being removed from this fund were among the top 10 most sold by institutional investors.

United Microelectronics Corporation (UMC) faced the brunt of the selling pressure, with institutional investors offloading over 150,000 shares. If all these sales are attributed to the 00919 fund's divestment, an additional 280,000 shares remain to be sold. Shipping company Yang Ming followed closely, with institutional investors selling approximately 150,000 shares that are still awaiting disposal. Investors are cautioned against rushing to buy these stocks until the selling pressure subsides.

Among the top 10 stocks sold by institutional investors on Thursday, only Fubon Financial and Cathay Financial were not among those being removed from the 00919 fund. The list of top sellers included UMC, Yang Ming, Fubon Financial, Cathay Financial, Grand Cathay Securities, Eclat Textile, WT Microelectronics, Walsin Technology, Quanta Computer, and Lotte Chemical Taiwan. Analysts advise investors to monitor the situation closely and potentially wait until the index fund completes its adjustments before making new investments in these affected stocks.