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Taiwan's stock market fell 846.34 points on October 22, closing at 46,041.43. Foreign and mainland Chinese investors sold a net NT$81.656 billion. The New Taiwan dollar closed at 32.508 against the US dollar. The image is an illustration of Taiwan stock market trading information.

Taiwan stocks fell sharply on Oct. 22, with the benchmark Taiex dropping 846.34 points to close at 46,041.43. Turnover reached NT$879.23 billion. Foreign and mainland Chinese investors posted net sales of NT$816.56 billion, while the three major institutional investors recorded combined net sales of NT$1,001.59 billion, underscoring the increasingly cautious market sentiment amid volatility in international technology stocks and pre-holiday position adjustments.

According to a report by the Central News Agency on Oct. 22, the Taiex opened higher before swinging lower, with a 1,290-point gap between its intraday high and low. It closed at a relative low for the session. Foreign investors had ended a 10-session selling streak in the previous trading session, but returned to heavy selling on Wednesday, including several exchange-traded funds.

The three major institutional investors took different positions during the session. Foreign and mainland Chinese investors posted net sales of NT$816.56 billion, dealers sold a net NT$273.78 billion, and investment trusts recorded net purchases of NT$88.75 billion. The combined net sales totaled NT$1,001.59 billion. Market analysts said weakness in Asian stocks, concerns over returns on AI investment and the possibility that a typhoon could affect market closures in Taiwan may have prompted some investors to reduce risk exposure ahead of time.

In the foreign-exchange market, the New Taiwan dollar closed at NT$32.508 against the US dollar on Wednesday, weakening by NT$0.02 from the previous session. Foreign-exchange traders said foreign capital flows remained an important factor affecting the exchange rate, while exporters' dollar selling and central bank intervention provided some intraday support. Market participants will continue to watch the US dollar's performance, foreign investor buying and selling, and the Taiex's subsequent moves.

Recent AI-related demand has supported Taiwan's semiconductor and server industries, but markets are also focused on the scale of capital spending by major technology companies, whether earnings growth can keep pace with investment, and the risk of overexpansion in AI infrastructure. A short-term correction in share prices does not necessarily indicate a deterioration in industry fundamentals. However, if corporate earnings or forward guidance falls short of market expectations, volatility in technology stocks could intensify.

Investors will be watching earnings reports from major US technology companies, the Federal Reserve's interest-rate decisions, foreign capital flows and price movements in heavyweight stocks such as TSMC. Taiwan's stock market will be closed for one day on Oct. 23 because of Typhoon Champi, making the market's reaction at the next opening a key focus for investors.