Local investors are bracing for a sharp market downturn today as the nation’s financial markets resume trading following a two-day closure for national holidays before the weekend, with sentiment rattled by US President Donald Trump’s sweeping tariff announcement.
Trump’s unveiling of new “reciprocal tariffs” on Wednesday triggered a sell-off in global markets, with the FTSE Taiwan Index Futures — a benchmark for Taiwanese equities traded in Singapore — tumbling 9.2 percent over the past two sessions.
Meanwhile, the American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, plunged 13.8 percent in New York between Thursday and Friday.
Photo: RITCHIE B. TONGO, EPA-EFE
On Wall Street, the Dow Jones Industrial Average slid 9.3 percent, while the S&P 500 shed 10.5 percent over the two sessions. At the same time, the Philadelphia Semiconductor Index plummeted 16.7 percent, and the tech-heavy NASDAQ dropped 11.5 percent.
Given the close correlation between Taiwan’s electronics-heavy market and movements in US tech stocks, analysts warned that a drop of similar magnitude in the local equities could put the TAIEX into technical correction territory.
The TAIEX closed 0.08 percent higher at 21,298.22 on Wednesday ahead of the extended holiday weekend. The benchmark index is down 7.54 percent since the beginning of this year.
For comparison, the benchmark index on Aug. 5 last year plunged an unprecedented 1,807.21 points, or 8.35 percent, to 19,830.88 on fears of economic weakness in the US and heightened geopolitical tensions, Taiwan Stock Exchange data showed.
“I think we could see the TAIEX first move back to the 20,000 level, or fall below 20,000 and fluctuate at the lower level seen in August last year,” Taishin Securities Investment Advisory Co (台新投顧) analyst Tony Huang (黃文清) said.
“The market had already reacted to the tariff issue before, but it’s just that the tariff rate of 32 percent on Taiwan is far higher than the previous assumption of 20 to 25 percent,” cable TV station USTV quoted Huang as saying yesterday.
“I think government funds, including the National Stabilization Fund [NSF, 國安基金], will take measures to stabilize the market,” he said.
The NT$500 billion (US$15.1 billion) NSF’s steering committee is scheduled to hold its regular meeting on Monday next week.
However, the committee could move to activate the fund in response to market turbulence, as permitted under Article 8 of the National Stabilization Fund Act (國家金融安定基金設置及管理條例). The clause allows intervention if major domestic or international events trigger large movements of international funds, significantly affect public confidence or lead to disorder in the capital market and financial market in Taiwan.
Whether the fund would be activated tomorrow to help stabilize the market remains uncertain, as it would depend on the extent of market volatility and the fund’s steering committee operates under the jurisdiction of the Ministry of Finance.
Premier Cho Jung-tai (卓榮泰) yesterday convened an emergency meeting with Financial Supervisory Commission Chairman Peng Jin-lung (彭金隆) and Taiwan Stock Exchange chairman Sherman Lin (林修銘) to discuss contingency plans in the event of a crisis.
President Capital Management Co (統一投顧) chairman Li Fang-kuo (黎方國) yesterday urged investors to remain calm and patient, saying the situation is more stable than the market panic seen during the COVID-19 outbreak in 2020.
“There are signals the stock market will stabilize: a reduction in margin loans, the shrinkage of trading volume and no further fall in the TAIEX despite negative news,” USTV quoted Li as saying.
“These three signals can help investors judge if the market has bottomed out,” he said.
“Nevertheless, don’t try to predict the low point of the index at this time,” he added.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
India’s ban of online money-based games could drive addicts to unregulated apps and offshore platforms that pose new financial and social risks, fantasy-sports gaming experts say. Indian Prime Minister Narendra Modi’s government banned real-money online games late last month, citing financial losses and addiction, leading to a shutdown of many apps offering paid fantasy cricket, rummy and poker games. “Many will move to offshore platforms, because of the addictive nature — they will find alternate means to get that dopamine hit,” said Viren Hemrajani, a Mumbai-based fantasy cricket analyst. “It [also] leads to fraud and scams, because everything is now
RSS