Shares closed lower yesterday, but recouped part of earlier losses as sentiment remained cautious in the wake of volatility on Wall Street overnight after US President Donald Trump confirmed tariffs on imports from Canada, Mexico and China would go into effect later in the day as planned.
Most Asian markets fell in volatile trade on fears of a trade war after China announced levies of 10 and 15 percent on a range of US agricultural imports in retaliation for Trump’s tariffs and Canada said it would respond in kind, with 25 percent tariffs on US$155 billion of US goods.
The TAIEX closed down 159.37 points, or 0.7 percent, at 22,596.88, with a turnover of NT$400.207 billion (US$12.16 billion), Taiwan Stock Exchange data showed.
Photo: CNA
The index had dropped by almost 400 points at one point before some bargain hunters emerged to pick up select electronics heavyweights to help the broader market recover some of its earlier losses by the end of the session, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) said.
“After the recent downturn, bargain hunters appeared active for the moment, setting their sights on large-cap tech stocks which had been hit hard by tariff concerns,” Tsai said.
Elsewhere in Asia, Tokyo’s Nikkei 225 dropped 1.2 percent to 37,331.18, the Hang Seng Index in Hong Kong lost 0.4 percent to 22,922.16, while the Shanghai Composite edged 0.2 percent higher to 3,324.21.
South Korea’s KOSPI gave up 0.2 percent to 2,528.92 and Bangkok’s SET lost 1.1 percent. Shares in Singapore, Sydney, Wellington, Jakarta and Kuala Lumpur were also down.
Concerns over the impact of a full-blown tariff war spread to European markets, with London, Paris and Frankfurt, Germany, all opening lower.
“The specter of a full-blown trade war is once again looming, threatening to choke global economic growth just as investors were starting to regain confidence,” SPI Asset Management managing partner Stephen Innes said.
Investors are hoping that China would announce a huge economic stimulus package at its key parliamentary meeting, the Chinese National People’s Congress, which opens today.
“In the upcoming National People’s Congress, Chinese policymakers could provide more pro-growth measures, including announcing a larger budget deficit target and maintaining a 5 percent growth target for this year,” Mitsubishi UFJ Financial Group Inc analyst Lloyd Chan said.
For now, markets no longer think Trump is full of bluster and are moving quickly to anticipate a slowdown in US and global growth, as trade conflict has begun in earnest and the US dollar is falling while bond yields dive.
“It is difficult for markets to get on with aggressive positioning given the risk of US tariff policies turning on a dime,” DBS Bank Ltd currency and credit strategist Chang Wei Liang (張偉亮) said. “In credit markets, spreads certainly look too low given the change in risk environment and a more adverse and uncertain trade backdrop.”
Volatility gauges for Treasuries and for US and Japanese stocks hit their highest levels of the year this week and implied volatility in currencies ticked higher.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
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