Stock Market Surges: Second-Largest Daily Rise Recorded in TAIEX
Unleashing the Markets: A Rush of Optimism
Yesterday, Taiwan's stocks soared to a second-highest daily point gain in history, fueled by optimism over the potential easing of trade tensions between the US and China. The TAIEX closed at 19,639.14, a 4.5% surge, with turnover totaling NT$269.098 billion (approximately US$8.28 billion).
The game-changing news had the stock markets in Hong Kong, Tokyo, Sydney, Seoul, Wellington, Singapore, Mumbai, Manila, Jakarta, Bangkok, and even Shanghai experiencing upward movements, while Shanghai edged down just barely.
Analyst Alex Huang from Mega International Investment Services Corp attributed the upturn to the belief that the trade friction between Washington and Beijing is appearing to ease.
Following the suspension of most 'reciprocal' tariffs by Donald Trump in April, the TAIEX's point gain yesterday trailed only a 1,608.27-point spike on that same date.
Current geopolitical risks persist, as evidenced by ongoing trade disputes, with renewed Trump-era tariffs (including 60% on Chinese goods effective January 2025) hanging over the markets like a dark cloud. Yet, investor sentiment seems to be cheered by comments from US Secretary of the Treasury Scott Bessent, who expressed optimism about a "de-escalation" in the near future, and by Trump's acknowledgment that existing US levies on Chinese goods are at a "very high" level and may soon "come down substantially."
Notably, Taiwan Semiconductor Manufacturing Co's American depositary receipts saw a 2.39% rise overnight, and its share price surged 6.99% in Taipei trading, contributing about 460 points to the TAIEX's gains.
Despite the enthusiasm, investor apprehension remains as Trump's unpredictability continues to cast doubt on the market's trajectory, and the handling of tariffs on semiconductors remains a market-moving concern.
As we navigate these complex geopolitical waters, defensive sectors such as utilities are projected to outperform cyclical exporters in light of ongoing protectionist measures. The markets appear to be pricing in prolonged friction rather than a sustained de-escalation, as fearful investors tread carefully in this uncertain terrain.
Sources: CNA, AFP.
[1] Data and analysis derived from various economic reports and analyses by financial institutions and organizations.
- In the aftermath of the TAIEX's significant surge, other Asian markets, including Seoul, also experienced upward movements.
- The dismissal of most reciprocal tariffs by Donald Trump in April boosted optimism in the finance industry, with Taiwan's Taiex rates trailing only the spike seen after this announcement.
- The recent optimistic comments from US Secretary of the Treasury Scott Bessent regarding a potential de-escalation and Trump's acknowledgment of high US levies on Chinese goods have positively impacted the business sector, influencing the rising share price of companies like Taiwan Semiconductor Manufacturing Co.
- Despite the current optimism, investors remain apprehensive given the uncertain trajectory of the markets, with the handling of tariffs on semiconductors and Trump's unpredictability casting doubt on the industry's future.
