AI Profit Concerns Trigger Sell-Off in Taiwan and Japan

Asian markets experienced a significant downturn on Wednesday, July 29, driven by investor skepticism regarding the profitability of artificial intelligence investments. In Taiwan, the benchmark Taiex index fell below the 40,000-point mark, dropping 1,830.55 points, or 4.40 percent, to close at 39,772.81. This followed a previous plunge of more than 2,000 points on Tuesday.

Taiwan Semiconductor Manufacturing Co. saw its shares fall 3.29 percent, contributing approximately 520 points to the Taiex decline. Other electronics stocks suffered similarly, with Nanya Technology Corp. experiencing a 10 percent drop. The sell-off was further exacerbated by an overnight 4.49 percent decline in the Philadelphia Semiconductor Index.

In Japan, the Nikkei 225 index fell 930.73 points, or 1.49 percent, to finish at 61,434.19, its lowest close in roughly two months. While the Nikkei briefly dropped over 3 percent during intraday trading, bargain hunting limited further losses. In contrast, the broader Topix index rose 0.26 percent to 3,974.03, supported by investors buying assets after the previous day's slump.