TAIEX Drops Below 45,000 on Global Market Woes

Taiwan's benchmark stock index, the TAIEX, dropped below 45,000 points on Wednesday, influenced by escalating Middle East tensions and overnight declines in US markets. The TAIEX closed down 589.33 points at 44,719.35, with turnover decreasing from the previous session. Most heavily weighted stocks, including TSMC, Foxconn, and Delta Electronics, saw considerable losses. The memory sector also experienced selling pressure, with several key companies reporting declines. Conversely, passive component stocks like Prosperity Dielectrics and shipping stocks such as Shih Wei Navigation performed well, buoyed by expectations of inventory adjustments nearing completion and a potential recovery in second-half orders.

Analysts suggest the current market downturn may be temporary. Ruan Hui-ci, an analyst at Da-hwa investment consulting firm, indicated that Wednesday was a settlement day for Taiwan index futures, and foreign investors with large positions may have incentivized downward price pressure. She anticipates the market will enter a period of consolidation, with technical indicators suggesting support at current levels. Concord Securities investment director Liao Chi-hung forecasts the TAIEX will trade between 44,000 and 46,000 points in the near term, awaiting a catalyst like Nvidia's earnings report for potential support in technology stocks. A sustained recovery, however, will likely require significantly higher daily trading volume.