The TAIEX yesterday slumped 2.98 percent, or 274.23 points, to close at 8943.20 as unease over US policy uncertainty deepened following the result of the US presidential election, analysts said.
The central bank and financial officials said they would take measures, if necessary, to stabilize the local bourse and currency, but analysts said the correction might persist until global funds figure out their next moves.
The election outcome has significant implications on the world because the US accounts for 25 percent of the global economy, central bank Governor Perng Fai-nan (彭淮南) told a meeting of the legislature’s Finance Committee.
Photo: EPA
Global financial markets might greet US president-elect Donald Trump’s victory with wild swings in line with the measure of market turbulence known as the VIX, Perng said.
The US might reshape its economic policies and trade ties with the world that might feature a rise in protectionism as Trump reiterated on the campaign trail.
“The central bank will join forces with the Financial Supervisory Commission and the Ministry of Finance to ensure the local market has sufficient liquidity and financial and foreign-exchange stability,” Perng said.
Yesterday’s turnover stood at NT$119 billion (US$3.78 billion), a volume rarely seen, as foreign players slashed NT$14.41 billion net worth of local shares, proprietary dealers cut NT$1.14 billion and mutual funds axed another NT$434 million, Taiwan Stock Exchange data showed.
The New Taiwan dollar held relatively steady, picking up 0.15 percent to NT$31.459 against the greenback in Taipei trading on turnover of US$967 million, the central bank said.
The US dollar took a hit after Trump’s victory that lowered expectations the US Federal Reserve would hike interest rates next month, a currency trader at a local bank said, adding that the markets need more time to assess the election fallout.
Deputy Minister of Finance Su Jain-rong (蘇建榮), who is in charge of the National Stabilization Fund, said that if necessary, the government would step in to shore up the local bourse.
However, Su said he did not detect a need for intervention after closely monitoring the market.
The TAIEX has gained 7.26 percent this year, aided by foreign fund inflows that bet on former US secretary of state Hillary Rodham Clinton winning the US presidential race, Marbo Securities Consultant Co (萬寶證券投顧) analyst Winson Wang (王榮旭) said.
Trump’s victory shattered the expectation of US policy continuity and the TAIEX might have to suffer more gains while global investors adjust their portfolios, Wang said by telephone.
Heavily weighted technology names led the correction, with shares in Largan Precision Co (大立光) falling 5.52 percent to NT$3,340, while Taiwan Semiconductor Manufacturing Co (台積電) declined 3.45 percent to NT$182, according to bourse data.
“They benefit most from fund inflows and are therefore more susceptible to fund flights,” Wang said.
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