Sharp declines in global bourses are likely to drag down the TAIEX today on its first trading day after the Lunar New Year holiday, but some sectors might be more resilient than others, analysts said yesterday.
"Since the TAIEX is likely to follow the tumble of US and other Asian markets during the holidays, we suggest that investors refrain from stock purchases upon the resumption of trading," JF Asset Management Co (
Marbo Securities Consultant Co (萬寶證券投顧) analyst Winson Wang (王榮旭) predicts a 2 percent to 3 percent tumble for the TAIEX today.
However, "although electronic shares -- which are highly reliant on the US market -- are likely to bear the brunt of selling pressure, we believe stocks related to tourism or commodities such as steel, petrochemical and bulk freighters, or those rich in real-estate assets will be more resilient," he said.
The weaker-than-expected performance reported in the US Institute of Supply Management (ISM) non-manufacturing index last month painted a gloomy picture for global economies.
The ISM's services index came in at 41.9 last month, the first time to fall below 50 since March 2003, indicating a sign of recession.
In response, the Dow Jones Industrial Average dropped 370.03 points, or 2.9 percent, to close at 12265.13 on Feb. 5. Standard & Poor's 500-stock index fell 3.2 percent and the NASDAQ Composite Index shed 3.1 percent.
The Dow lost 4.4 percent at the close of last week while the S&P fell 4.6 percent and the NASDAQ ended down 4.5 percent.
IBT Securities (
Hong Kong's Hang Seng Index declined 853.35 points, or 3.64 percent, to close yesterday to 22,616.11. Japan's Nikkei Index fell 189.91 points, or 1.44 percent, to close at 13,017.24.
"Since the local market was closed over the past six trading days for the Lunar New Year holidays, it has yet to reflect the mayhem on the global markets," Hsueh said.
Though investors may be tempted to take refuge in traditional industries that are likely to benefit from the rising prices of commodities, farm products, and precious metals, it is still safer to minimize overall exposure by increasing the percentage of cash in their portfolios, he said.
"Hold on to your cash," Hsueh said. "It is too early to talk about bottom-fishing right now, as visibility of a rebound on the economic front is still low."
Also see: Asian stocks fall on growth concerns
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to