Taiwan’s stock market experienced a severe downturn as the weighted index plunged over 1,500 points and the OTC-listed櫃買 index dropped nearly 6%. The sell-off, triggered by renewed tensions between the U.S. and Iran, resulted in widespread declines across semiconductor and electronic sectors.
Market Volatility Following U.S.-Iran Conflict Escalation
The sudden market instability follows an announcement by U.S. President Donald Trump on Truth Social regarding a new blockade against Iran. According to reporting from LTN, the administration plans to impose a 20% transit fee on goods passing through the region. This development sparked immediate reactions in global markets, sending international oil prices surging by more than 9% and driving U.S. Treasury yields higher.
While equity markets in Japan and South Korea saw early morning recovery attempts, the Taiwan Stock Exchange faced aggressive selling pressure. The benchmark index plummeted by more than 1,500 points, while the櫃買 (OTC) index suffered a nearly 6% decline, breaking through its quarterly support level.
Impact on High-Value Tech Stocks and Electronic Components
According to reporting from LTN, six thousand-dollar stocks hit their limit down, including:
- Creativity (3443)
- Alchip-KY (3661)
Additionally, four other companies—Zhusheng (6739), Gold Circuit Electronics (2368), AllRing Tech (6187), and Zhaolian (6944)—fell out of the thousand-dollar stock tier entirely during the trading session.
Investor Outlook and Upcoming Market Catalysts
Market participants are now closely monitoring upcoming economic indicators to gauge the duration of this inflationary pressure. Investors are particularly focused on the Federal Reserve chair’s upcoming testimony and new inflation data, which may provide guidance on the future trajectory of interest rates.
Despite the current climate of risk, market analysts note that there are still potential areas of support for the domestic market. Expectations remain high for the upcoming earnings conference by TSMC (2330), and themes surrounding the biotechnology exhibition are expected to provide some sector rotation. However, caution remains necessary as foreign investors have increased their net short positions in Taiwan Index Futures by more than 81,000 contracts, raising concerns about potential downward pressure as the weekly settlement approaches.
Financial experts suggest that investors maintain liquidity and avoid excessive leverage during this period of uncertainty. The recommended strategy focuses on prioritizing large-cap AI-related stocks with high liquidity until market volatility subsides.
Find more reporting in our Business section.
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