Taiwan's Shares Potentially Lose Momentum on Tuesday
Taiwan Stock Exchange Closes Higher Amid Global Market Volatility
The Taiwan Stock Exchange (TSE) finished higher on Monday, despite a cautious outlook for Asian markets following the release of U.S. inflation data. The TSE closed at 24,135.50 points, up 114.24 points or 0.48 percent.
The immediate reaction to the U.S. inflation data caused a tech selloff, pressuring Taiwan shares down over 2%, especially in electronics. Major tech companies like Taiwan Semiconductor Manufacturing Company (TSMC) dropped over 3%, with others such as ASE Technology and Hon Hai Precision also declining substantially. However, some tech companies managed to buck the trend, with MediaTek gaining 0.37 percent and Largan Precision increasing 0.21 percent on the TSE.
Earlier in the week, the TWSE was modestly higher, hovering just above the 24,480 level, with gains in the finance and plastics sectors somewhat offsetting mixed technology results. E Sun Financial fell 0.30 percent, while Cathay Financial perked 0.17 percent, Fubon Financial climbed 1.17 percent, and Mega Financial collected 0.62 percent on the TSE.
In the broader Asian context, uncertainty persists due to geopolitical and trade tensions, but some markets like Hong Kong have outperformed in 2025, supported by technology advances, domestic consumption, and fiscal easing in China, suggesting selective opportunities despite macroeconomic risks.
The TSE's performance was mirrored in the U.S., where the S&P 500 fell 16.00 points on Wall Street. The Labor Department's report on consumer price inflation in the month of July is likely to be in focus today.
Crude oil edged higher on Monday, with West Texas Intermediate crude for September delivery at $64.05 per barrel. Russia's continued aggression in Ukraine has affected the price of crude oil, as the country has shrugged off the U.S. deadline to end its war with Ukraine or face sanctions.
In the TSE, Formosa Plastics rallied 2.40 percent, while Nan Ya Plastics skyrocketed 8.29 percent. Asia Cement slumped 1.86 percent, while Catcher Technology retreated 1.64 percent. Hon Hai Precision jumped 1.80 percent, and Novatek Microelectronics tumbled 1.82 percent.
The CME Group's FedWatch Tool indicates an 86.5 percent chance of a quarter point interest rate lowering by the Federal Reserve next month. This could provide a boost to the TSE and other Asian markets, as lower interest rates often lead to increased investment and economic growth.
Overall, the TSE's performance reflects the current state of global markets, with a cautious outlook amid ongoing geopolitical tensions and economic uncertainty. However, the medium to longer-term forecasts for the TWSE remain positive, with expected gains into late 2025 despite current dips.
- In the broader context, some Asian markets like Hong Kong are outperforming in 2025, supported by technology advances, domestic consumption, and fiscal easing in China, indicating opportunities for growth in the technology sector.
- The CME Group's FedWatch Tool suggests an 86.5 percent chance of a quarter point interest rate lowering by the Federal Reserve next month, which could potentially boost the technology industry, as lower interest rates can lead to increased investment and economic growth.
