Taiwan's Stock Market Weather May Clear Amid Global Tailwinds

After three consecutive sessions of losses that pushed the Taiwan Stock Exchange down approximately 1,200 points or 3.7%, market participants are cautiously hopeful for Tuesday’s session. With the index hovering just above the 31,620-point level, favorable international economic signals suggest the weather conditions for Taiwan stocks may be shifting. Global markets demonstrated solid upward momentum, with both European and U.S. bourses posting gains—a pattern the Asian markets are expected to follow.

Three-Day Decline Reflects Broad-Based Pressure

Monday’s trading painted a sobering picture for the Taiwan stock market, with the TSE declining sharply by 439.72 points or 1.37% to close at 31,624.03. The index fluctuated between 31,359.95 and 32,008.46 during the session, reflecting investor uncertainty across multiple sectors.

Financial stocks led the decline, with First Financial retreating 0.52%, Fubon Financial down 0.44%, and E Sun Financial sliding 0.30%. The technology sector also faced headwinds, as Taiwan Semiconductor Manufacturing Company dropped 0.56%, while both Hon Hai Precision and United Microelectronics Corporation fell 2.72%. MediaTek suffered a sharper decline of 3.13%, and Delta Electronics crashed 3.69%. Among semiconductor specialists, Largan Precision tanked 2.28%, Catcher Technology dipped 0.25%, and Novatek Microelectronics tumbled 1.73%.

The plastics sector weathered the most severe storm, with Formosa Plastics plummeting 6.34% and Nan Ya Plastics cratering 6.98%. Asia Cement slumped 1.56%, while Cathay Financial, Mega Financial, and CTBC Financial remained flat through the session.

Wall Street’s Rally Creates Tailwinds for Asian Markets

The international market weather showed a marked improvement, providing potential support for Taiwan equities. Wall Street’s performance exemplified this shift, with major indices opening modestly but quickly gaining traction to finish in positive territory. The Dow Jones Industrial Average jumped 515.19 points or 1.05% to 49,407.66, the NASDAQ added 130.29 points or 0.56% to reach 23,592.11, and the S&P 500 gained 37.41 points or 0.54% to close at 6,976.44.

This strength emerged following the release of the Institute for Supply Management’s manufacturing report, which revealed an unexpected expansion in U.S. manufacturing activity for the first time in 12 months during January. Such positive economic data typically attracts risk-on sentiment among investors globally.

Trade Optimism Counters Market Caution

The market’s upward momentum received further support when President Donald Trump announced a trade deal with India. However, traders have adopted a more measured approach to making large-scale moves, remaining cautious ahead of Friday’s highly anticipated monthly jobs report from the U.S. Labor Department. This hesitation reflects the market weather of uncertainty—despite positive signals, participants prefer to await additional economic confirmation.

Oil Price Pressure Reflects Geopolitical Shift

Crude oil prices tumbled significantly on Monday as tensions between the U.S. and Iran appeared to de-escalate, reducing concerns about potential supply disruptions in the Middle East. West Texas Intermediate crude for March delivery fell $3.28 or 5.03% to $61.93 per barrel, reflecting a diminishing geopolitical risk premium. This weakness in oil prices may limit upside potential for energy-related stocks despite broader market optimism.

Taiwan’s stock market may find clearer skies ahead as global economic conditions show improvement and international market sentiment turns supportive. However, investors should remain vigilant regarding sector-specific weakness in technology and plastics—areas that have proven vulnerable to both domestic and international market pressures. The Taiwan bourse’s trajectory this week will likely depend on whether positive international signals can overcome lingering sector-specific headwinds.