The Taiwan stock market is poised for a rebound on Tuesday, November 12, 2024, following a minor setback on Monday that saw the Taiwan Stock Exchange (TSE) conclude a robust five-day winning streak. Despite the slight dip, market analysts anticipate a positive trajectory, driven by an optimistic global forecast for Asian markets, largely influenced by the aftermath of the U.S. election.
On Monday, the TSE index experienced a marginal decline, shedding 24.25 points, or 0.10 percent, to close at 23,529.64. This modest reduction occurred after the index traded within a range of 23,306.66 and 23,563.80 points throughout the day. The previous five trading sessions had demonstrated significant upward momentum, with the market rallying more than 770 points, translating to a 3.4 percent gain, before Monday’s slight correction. The Taiwan Stock Exchange now rests just beneath the 23,530-point plateau, with expectations for it to bounce higher again on Tuesday.
Sectoral Performance and Key Movers
Monday’s trading session presented a mixed picture across various sectors within the Taiwan market. Financial shares and plastics companies largely contributed to the day’s losses, while the technology sector displayed a more varied performance.
- Financial Sector: Several key financial institutions experienced declines. Cathay Financial shed 0.51 percent, CTBC Financial eased 0.16 percent, First Financial dipped 0.19 percent, and Fubon Financial slumped by a notable 1.29 percent. Conversely, Mega Financial managed to collect 0.26 percent, offering a slight counterpoint to the sector’s overall downturn. E Sun Financial remained unchanged.
- Technology Sector: The technology segment showed divergence. Taiwan Semiconductor Manufacturing Company (TSMC), a global bellwether, lost 0.46 percent, and United Microelectronics Corporation (UMC) fell 0.21 percent. However, other tech players posted gains, including Hon Hai Precision, which advanced 0.92 percent; Catcher Technology, which rallied 2.09 percent; MediaTek, climbing 1.17 percent; Delta Electronics, rising 0.24 percent; and Novatek Microelectronics, strengthening by 1.54 percent. Largan Precision closed unchanged.
- Plastics and Other Industries: The plastics industry faced significant headwinds, with Formosa Plastics stumbling 2.52 percent and Nan Ya Plastics skidding 1.05 percent. Asia Cement also experienced a substantial drop, tanking 2.31 percent.
Global Market Tailwinds and U.S. Election Impact
The broader global forecast for Asian markets remains positive, primarily driven by the inertia following the recent U.S. election. European and U.S. markets concluded Monday’s trading session with gains, setting a precedent that Asian bourses are widely expected to follow.
Wall Street provided a cautiously optimistic lead, with major U.S. averages opening higher on Monday and maintaining upward momentum throughout the day to finish with mild gains. These closing figures marked fresh record highs for all three major indices:
- The Dow Jones Industrial Average jumped 304.14 points, or 0.69 percent, to close at 44,294.13.
- The NASDAQ Composite rose 11.99 points, or 0.06 percent, finishing at 19,298.76.
- The S&P 500 added 5.81 points, or 0.10 percent, to end the day at 6,001.35.
Investor sentiment in the U.S. was buoyed by optimism surrounding the potential impact of Donald Trump’s proposed policies, such as tax reductions and deregulation, which are widely anticipated to help boost corporate earnings.
Commodity Market Movements
In contrast to the equity markets, oil futures closed sharply lower on Monday. West Texas Intermediate (WTI) Crude oil futures for December delivery ended down $2.34, or 3.6 percent, settling at $68.04 a barrel. This decline was attributed to a stronger U.S. dollar and ongoing concerns regarding global demand for crude.
Despite Monday’s fractional dip, the underlying sentiment for the Taiwan stock market remains robust, with a predicted rebound for Tuesday. The positive momentum from global markets, particularly the record-setting performance on Wall Street and the lingering optimism surrounding U.S. policy outlooks, is expected to provide significant tailwinds for the Taiwan Stock Exchange, reinforcing its potential to regain and surpass recent highs.
