Taipei — Taiwan’s stock market experienced a notable recovery on Tuesday, rebounding from a historic plunge the previous day. The main index closed up 3.4% after hitting a low of 20,640.44 points during the session, following a record 8.4% drop on Monday. The resurgence in Taiwan’s market was marked by a significant 8% gain in shares of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker.
Market Recovery and Performance
The rebound came in response to the sharp global market declines, influenced by concerns over a potential U.S. recession and investor flight from riskier assets. TSMC, a critical supplier for major tech companies like Nvidia, saw its shares rise by 8%. Other major tech stocks also saw gains:
Mediatek: Up 8.5%
Quanta: Increased by 3.1%
Investor Sentiment
Despite the rebound, investor sentiment remains cautious due to ongoing concerns about the U.S. economy and the rapid appreciation of the Japanese yen, which has added to market uncertainty. Jeff Chang, Chairman of Cathay Securities Investment Trust, noted that the plunge was somewhat expected given the broader economic climate.
Chang indicated that the Taiwan main index has reached a level of strong technical support but anticipates a period of consolidation. He pointed out that the fundamentals of the AI industry remain robust and views current conditions as a potential buying opportunity for AI stocks.
Government and Regulatory Response
Taiwan’s Premier, Cho Jung-tai, reassured the public about the solidity of Taiwan’s economic fundamentals and emphasized that authorities would closely monitor the market situation. Additionally, Taiwan Stock Exchange President Lih-Chung Chien mentioned that the bourse would collaborate with regulators to ensure market stability as needed.
Outlook
The positive movement in Taiwan’s stock market reflects a temporary stabilization following a dramatic decline. However, the outlook remains cautious as investors and analysts continue to assess the broader implications of economic conditions in the U.S. and fluctuations in global currencies. The recovery in TSMC and other tech stocks suggests potential for further stabilization, but market participants will be keeping a close watch on both domestic and international economic developments.
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