Limited Rebound in Taiwan’s Market Post-Holiday

On April 8, in Taipei, Taiwan, there was a notable recovery in the stock market following a decline observed on April 3, just before the Tomb Sweeping Festival holiday. However, the gains were tempered by ongoing concerns regarding the timing of the U.S. Federal Reserve’s potential initiation of a rate-cut cycle.

The Taiex, which represents the Taiwan Stock Exchange’s weighted index, closed the day at 20,417.70, up by 80.10 points or 0.39 percent. Throughout the trading session, the index fluctuated between 20,379.83 and 20,487.83, with a total turnover of NT\(400.63 billion (US\)12.47 billion).

Although the electronics sector, a key player in the market, experienced a modest upturn, investor interest shifted towards non-tech stocks, particularly in the financial sector. This shift helped the overall market maintain levels above the previous closing point.

The market commenced with a 0.28 percent increase, bouncing back from the 0.63 percent dip on April 3. The buying momentum, primarily driven by large-cap stocks like Taiwan Semiconductor Manufacturing Co. (TSMC), intensified following positive movements in the Nasdaq and Dow Jones Industrial Average on Friday.

Despite the positive momentum, as the Taiex approached the 20,500-point mark, some investors opted to capitalize on their profits, leading to a partial reversal. Notably, certain traditional economy and financial stocks demonstrated resilience throughout the session.

Analyst Tsai Ming-han from Cathay Futures Consultant noted, “The recent gains in the U.S. markets were largely technical in nature, and this translated into a cautious market sentiment in Taiwan.”

The electronics sector, which initially spearheaded the market’s upward trajectory before retracing some gains, saw a 0.22 percent increase, with the semiconductor subindex edging up by only 0.05 percent. TSMC, a significant player, closed at NT$783.00, marking a 0.38 percent gain.

Looking ahead, investors are anticipating insights from TSMC’s upcoming investor conference scheduled for April 18, which is expected to provide valuable market perspectives.

While heavyweight semiconductor stocks experienced a slowdown, companies involved in artificial intelligence development garnered investor interest, driving rotational buying activities. Notably, in the computer and peripheral industry, Giga-Byte Technology Co. and Wistron Corp. witnessed positive movements.

Furthermore, the financial sector attracted bargain hunters, offering stability to the broader market. Stocks such as Yuanta Financial Holding Co., CTCB Financial Holding Co., Cathay Financial Holding Co., and Fubon Financial Holding Co. recorded gains, contributing to the sector’s 0.94 percent rise.

Electric machinery and wire/cable manufacturers benefited from Taiwan Power Co.’s substantial investments in enhancing the country’s electricity grid networks. Companies like Allis Electric Co., Shihlin Electric & Engineering Corp., Hua Eng Wire and Cable Co., and Walsin Lihwa Corp. experienced notable upticks in their stock prices.

As the U.S. dollar continued to strengthen against the Taiwan dollar, prompting capital outflows, sustaining significant market gains remains challenging. Investors are advised to monitor the upcoming U.S. March inflation data release, which is expected to influence the value of the greenback.

Foreign institutional investors divested a net NT\(12.37 billion worth of shares on the main board on Monday, coinciding with the U.S. dollar’s rise to close at NT\)32.095 against the Taiwan dollar.