TAIPEI (Taiwan News) — Taiwan’s stock market dropped Tuesday as trading volume thinned and investor sentiment wavered amid volatile intraday movements and growing speculation about US monetary policy.
The Taiwan Stock Exchange Capitalization Weighted Stock Index, or TAIEX, fell 312.77 points to close at 18,793.43. Turnover totaled NT$243 billion (US$7.9 billion), per CNA and CTEE.
The downturn followed remarks from US President Donald Trump, who urged Federal Reserve Chair Jerome Powell to cut interest rates. This affected US stock, currency, and bond markets and extended their impact to Taiwan.
Investor reaction to interest rate changes often depends on the perceived context. If a rate cut is seen as lowering borrowing costs and boosting corporate profitability, equities may rise, but if the move is interpreted as a response to looming recession risks, it may instead trigger market declines, according to NC State University.
TSMC and MediaTek saw sharp declines in the final hours of trading, with the last transaction recording NT$23 billion in sell orders, marking the TAIEX’s lowest point of the day. Electronics stocks ended the session down 2.02%, while the financial sector dropped 1.4%.
TSMC fell 2.28% to close at NT$816 (US$25). MediaTek dropped 3.35%, closing at NT$1,300, while Foxconn fell 3.3% to close at NT$132.
As US stocks fell and the US dollar weakened, market funds poured into gold as a safe haven, pushing gold prices over US$3,400 per ounce (28 g). Gold-related stocks were buoyed, with Super Dragon Technology and Jiin Yeeh Ding hitting the daily limit-up price.
Gold ETFs (exchange-traded funds) such as the Yuanta S&P GSCI Gold 2x Leveraged ER Futures ETF gained over 5%. The Yuanta S&P GSCI Gold ER Futures ETF rose 2% on strong trading volume.
The US imposed new anti-dumping and countervailing duties on solar imports from four Southeast Asian countries, with Cambodian products facing tariffs exceeding 3,500%. In response, Taiwan's solar stocks, including Gigastorage, United Renewable Energy, Tainergy Tech, Anji Technology, Taiwan Solar Energy, Gigasolar Materials, and Motech Industries, all hit the daily limit.
As US-China tariff tensions escalate, industry analysts expect both countries to redirect more optical communication module orders to Taiwanese manufacturers to avoid high duties. This trend has started to take shape, with increased demand boosting silicon photonics-related stocks as LuxNet climbed 8.78%, while Browave and Axcen Photonics each posted gains of over 5%.
Taishin 2000 High Technology Equity Fund Manager Shen Chien-hung (沈建宏) said that the current slowdown in AI hardware investment suggests a lack of robust fundamental drivers for market advancement. Shen also observed significant declines in equity markets in both the US and Taiwan.
With a decrease in margin lending activity in Taiwan and more attractive dividend yields emerging in the wake of recent price corrections, Shen advised closely monitoring the market for potential signs of a bottom.
This information is not intended as personalized financial advice. Investors are encouraged to conduct their own research and analysis before making investment decisions.
