(Bloomberg) -- Foreign investors pulled out of Taiwan’s technology-heavy stock market in record numbers after renewed concerns about overheating in the artificial intelligence sector fueled a global rout.
Overseas investors sold NT$100.8 billion ($3.1 billion) of Taiwanese shares on a net basis on Wednesday, a record daily outflow according to Bloomberg-compiled data that started in 2000.
Their hasty retreat came after AI bellweather Nvidia Corp. suffered the biggest market cap slide in history, which led to a wave of selling in Asian tech stocks. Shares of Taiwan Semiconductor Manufacturing Co., a key supplier to Nvidia, ended the day down 5.4%, while Taiwan’s main stock benchmark lost 4.5%.
“Taiwan and TSMC’s share performance have become increasingly correlated with Nividia’s over the past year, and recent market volatility is reflecting concerns on the AI demand outlook,” said Marvin Chen, a strategist at Bloomberg Intelligence. “While the earnings growth for the chip sector still looks strong, valuations may be a near term concern.”
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