Despite heavy losses in the U.S. markets overnight, Taiwan’s stock market rebounded as investors rallied behind contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and select companies involved in artificial intelligence (AI) development. The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), defied initial losses to close slightly higher, demonstrating resilience amidst global market fluctuations.
Bargain hunting emerged as a dominant theme in the trading session, with TSMC and AI-related stocks taking center stage, bolstering investor confidence. Taiwan’s stock market exhibited remarkable resilience on Wednesday, with the Taiex index closing 34.29 points higher at 16,310.36, representing a 0.21 percent increase.
This positive trajectory came despite the previous day’s heavy losses in the U.S. markets. While the Dow Jones Industrial Average and the Nasdaq index recorded declines of 1.14 percent and 1.54 percent, respectively, the Taiex initially opened with a modest dip of 2.23 points. But, the market remained relatively stable throughout the trading session, maintaining a narrow range.
Bargain hunting sparks late-session rally
The turning point came when bargain hunters actively entered the market, particularly during the late trading session. Their focus was on acquiring shares of Taiwan Semiconductor Manufacturing Co. (TSMC) and AI-related stocks, ultimately driving the Taiex past the critical 16,300 point mark.
This rebound marked a mild recovery following the previous day’s 1.07 percent plunge. According to observations made by analyst Tsai Ming-han, the significant losses in the U.S. markets overnight were attributed to an increase in treasury yields, a factor that had already been factored into the local main board’s pricing on Tuesday. Consequently, investors engaged in bargain hunting on Wednesday, capitalizing on the previous day’s substantial market decline. Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, played a pivotal role in the market’s resurgence.
TSMC’s stock rose by 0.58 percent, closing at NT$522.00, rebounding from an early low of NT$516.00. This gain contributed approximately 25 points to the Taiex’s overall rise and drove the electronics index and semiconductor sub-index higher by 0.39 percent and 0.36 percent, respectively. Other semiconductor companies, such as United Microelectronics Corp. and MediaTek Inc., experienced mixed results during the trading session.
AI stocks find support
Certain AI-related stocks also benefited from bargain hunting. Companies like AI server maker Quanta Computer Inc. surged by 3.84 percent to close at NT$230.00, while rival Wistron Corp. gained 1.48 percent, ending at NT$103.00. This renewed interest in AI-related firms reflected investor confidence in the long-term potential of artificial intelligence technology.
With electronic stocks trading within a narrow range, investors diversified their portfolios by seeking opportunities outside the tech sector. Bulk cargo shippers and tourism stocks received a boost from this rotational buying. Bulk cargo shipping companies, including Chinese Maritime Transport Ltd., Sincere Navigation Corp., and U-Ming Marine Transport Corp., saw gains ranging from 1.05 percent to 1.48 percent. In the tourism industry, companies like FarGlory Hotel Co., FDC International Hotels Corp., and My Humble House Hospitality Management Consulting posted increases between 0.92 percent and 1.55 percent.
While some sectors thrived, the steel industry faced challenges, with the largest steel maker in Taiwan, China Steel Corp., expressing caution about its operations due to weak global demand. As a result, China Steel lost 2.30 percent, and other steel companies, including Tung Hon Steel Corp. and Chung Hung Steel Corp., experienced declines of 2.86 percent and 3.58 percent, respectively. Cathay Financial Holding Co., a company in the financial sector, rose 0.34 percent, while Fubon Financial Holding Co. remained unchanged.
Foreign investors remain cautious
Despite the positive market performance, foreign institutional investors continued to be net sellers, with net sales of NT$1.49 billion worth of shares on the main board Wednesday, following net sales of NT$23.16 billion on Tuesday. This caution may be attributed to global economic uncertainties and anticipation of the upcoming Mid-Autumn Festival.
Taiwan’s stock market displayed resilience in the face of challenging global economic conditions. Bargain hunters, particularly interested in TSMC and AI-related stocks, contributed to the market’s recovery, showcasing investor confidence in the technology and AI sectors. While foreign investors remained cautious, diverse investment opportunities in other sectors provided stability and support for the market’s overall performance.