Stocks experience a steep drop of over 340 points
💼 Taiwanese Stocks Tumble Amid US-China Trade Worries 💼
In an unwelcome post-holiday surprise, Taiwanese stocks dived by over 340 points yesterday. The dragon slayer, in this case, was not a mythical beast but the uncertainty surrounding US trade policies, causing investor unease after President Donald Trump announced increased tariffs on steel and aluminum imports from China.
Trump's proposal, followed by US Secretary of Commerce Howard Lutnick's criticism of China's sluggish implementation of the earlier agreed trade deal, has raised concerns about a potential trade war between the world's two economic giants. The Chinese Ministry of Commerce responded with a statement denying any breach of the agreement, alleging that the US is making "bogus charges."
📉 Market Meltdown 📉
The TAIEX closed 1.61 percent lower at 21,002.71, with a total turnover of NT$344.76 billion (US$11.50 billion). The market opened 0.44 percent in the red and continued to plunge throughout the session, primarily due to heavy selling in the bellwether electronics sector and large-cap semiconductor stocks.
🔬 Electronic Elephants 🔬
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC) took the biggest hit, ending the day 2.17 percent down at NT$946, while smartphone IC designer MediaTek Inc showed a minor resilience, closing unchanged at NT$1,260. Other notable stocks in the electronics sector, such as iPhone assembler Hon Hai Precision Industry Co and AI server supplier Quanta Computer Inc, also experienced significant losses.
🔢 Technical Analysis 🔢
According to analyst Tsai Ming-han, the TAIEX has become technically weaker as it fell below the 20-day moving average of 22,815 points, indicating a potentially continued downward trend. Cautious investment is recommended as long as the tariff issue remains unresolved.
🌐 Regional Reflections 🌐
Most Asian markets slumped in response to the US-China trade uncertainty, with the exception of Seoul and Manila, which saw minor gains. The lack of reaction to the cooling US Federal Reserve's inflation gauge may suggest a shifting global focus towards trade-related news. Shanghai was closed for a holiday.
With ongoing developments in US-China trade relations and their potential impact on Taiwanese semiconductor stocks, investors will likely remain on edge in the coming weeks. Thetilting balance between geopolitical tensions and trade agreements, especially in Asia, continues to influence global market dynamics.
- In light of the US-China trade worries, the uncertainty in finance and industry has led to cautious investing in the business sector, with the geopolitical news being a significant focus.
- The proposed tariff increase by President Trump and the subsequent critique by US Secretary of Commerce Howard Lutnick have a broader impact, causing concerns about the financial stability of not only the US and China, but also their respective trade partners.
- The potential trade war between the US and China seems to have affected the general-news landscape, as the news of market meltdowns, such as the one in Taiwan, are being heavily reported and analyzed in the finance and business sectors.
