The Taiwan stock market, having endured two consecutive trading days of declines, is poised for a potential reversal on Friday, aiming to halt a significant downturn that has seen the index shed more than 1,550 points, or 3.5 percent, in that span. The Taiwan Stock Exchange (TSE) currently sits just beneath the 43,150-point plateau, with market participants looking for positive global cues to stem the recent losses.
Thursday’s Performance and Sectoral Movements
On Thursday, the TSE finished marginally lower, registering a decline of 76.08 points, or 0.18 percent, to close at 43,149.46. The index traded within a range of 42,006.39 and 43,463.03 throughout the session. The day’s performance was characterized by mixed results across key sectors, including financial shares, technology stocks, and plastics companies.
In the financial sector, Cathay Financial saw a gain of 0.60 percent, First Financial rose 0.33 percent, Fubon Financial rallied by 2.45 percent, and E Sun Financial added 0.59 percent. Conversely, CTBC Financial skidded 1.03 percent, while Mega Financial remained unchanged.
Technology stocks presented a varied picture. Taiwan Semiconductor Manufacturing Company (TSMC) experienced a slight dip of 0.22 percent. However, United Microelectronics Corporation (UMC) soared significantly by 5.49 percent. Other notable movements included Hon Hai Precision tumbling 1.71 percent, Largan Precision improving 0.85 percent, and Catcher Technology gaining 0.49 percent. MediaTek retreated 1.68 percent, Delta Electronics tanked 1.82 percent, and Novatek Microelectronics jumped 1.99 percent.
Within the plastics industry, Formosa Plastics declined 1.35 percent, while Nan Ya Plastics spiked 2.22 percent. Asia Cement also saw a modest increase of 0.29 percent.
Global Tailwinds from Wall Street and Geopolitical Developments
The global forecast for Asian markets is decidedly upbeat, largely influenced by a strong positive lead from Wall Street. Major U.S. averages, which opened modestly higher on Thursday, accelerated their gains late in the day to close sharply higher. The Dow Jones Industrial Average soared 929.97 points, or 1.86 percent, to finish at 60,848.75. The NASDAQ Composite rallied 640.16 points, or 2.54 percent, ending at 25,809.66, and the S&P 500 jumped 127.31 points, or 1.75 percent, to close at 7,394.30.
This late-day rally on Wall Street was primarily attributed to a significant plunge in crude oil prices. The decline in oil prices followed an announcement that President Donald Trump had called off previously announced attacks against Iran. This geopolitical de-escalation provided a substantial boost to market sentiment.
Furthermore, bargain hunting played a role in the surge, as investors capitalized on the weakness observed during Wednesday’s session, which had dragged the NASDAQ and S&P 500 down to their lowest closing levels in a month. Despite a report from the Labor Department indicating that producer prices increased by more than expected in May, traders largely shrugged off this data, focusing instead on the positive geopolitical and oil market developments.
Crude Oil Plunge Fuels Optimism
The dramatic fall in crude oil prices on Thursday was a key driver of the improved market sentiment. West Texas Intermediate (WTI) crude for July delivery was down $2.81, or 3.12 percent, settling at $87.22 per barrel. This sharp decline in energy costs is generally viewed as a positive for global economic activity and consumer spending, contributing to the overall optimistic outlook for Friday’s trading.
With European and U.S. markets closing higher, Asian bourses are widely expected to follow suit, potentially providing the necessary traction for the Taiwan Stock Exchange to stop its recent bleeding. The confluence of a de-escalation in geopolitical tensions, a significant drop in crude oil prices, and renewed bargain hunting suggests a more favorable environment for equities as trading commences on Friday.
