GEOPOLITICAL RELIEF:
Technology stocks benefited the most from the rise, with Delta Electronics Inc hitting the 10 percent daily limit with a new trading record.
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By Crystal Hsu / Staff Reporter
Taiwanese stocks rose sharply yesterday after the United States and Iran agreed to a two-week ceasefire that injected a burst of optimism into markets.
The benchmark TAIEX index rose 1,531.56 points, or 4.61 percent, to close at 34,761.38, marking the second-largest single-day point gain on record, while the new Taiwan dollar rose NT$0.182 to finish at NT$31.785 against the US dollar.
Turnover in the local main market rose to NT$856.26 billion (US$26.94 billion) from NT$584.69 billion on Tuesday, reflecting broad investor participation.
Photo: CNA
The rally was prompted by easing geopolitical tensions after US President Donald Trump announced a two-week suspension of planned attacks on Iran under a conditional ceasefire.
The ceasefire depends on Tehran reopening the Strait of Hormuz, a strategic point for global oil shipments. Iran agreed to temporarily reopen the strait, causing Brent crude futures to fall as much as 15 percent to below $100 a barrel and easing some inflationary pressures in global markets.
“Markets generally treat the two-week window as positive,” said Taishin Securities Investment Advisory Co (台新投顧) vice president Tony Huang (黃文清).
Even if tensions persist beyond two weeks, the situation is unlikely to escalate into a protracted conflict, giving investors a chance to return to risk assets, he said.
Institutional investors led the buying frenzy, signaling a shift in market sentiment after a period of pessimism.
Foreign institutional investors, who had been rapidly exiting the local market last month, increased their holdings of Taiwanese stocks by a net NT$117.77 billion yesterday, Taiwan Stock Exchange data showed.
Investment trusts added a net total of NT$4.28 billion, while proprietary traders overbought NT$35.87 billion, exchange data showed.
The technology and electronics sectors were at the forefront of the rally. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, gained nearly 5 percent to close at NT$1,950.
MediaTek Inc (聯發科), a major smartphone chip designer, rose 7 percent to NT$1,580, while Hon Hai Precision Industry Co (鴻海), a major electronics assembler, rose about 5 percent to NT$201.50. Delta Electronics Inc (台達電), a manufacturer of electronic components and power supplies, hit the daily trading limit of 10 percent at NT$1,665, marking a new all-time high.
Analysts said the rise reflects a combination of geopolitical relief and renewed investor confidence in Taiwan’s technology market.
“Declining geopolitical risks prompted investors to return to stocks after a period of volatility, and technology stocks benefited from renewed global risk appetite,” Huang said.
Market participants are expected to return their focus to fundamentals as TSMC and other technology companies are scheduled to report results next week.
TSMC and other major tech companies issued optimistic revenue forecasts in January, citing strong demand for artificial intelligence applications, while the Directorate General of Budget, Accounting and Statistics in February projected GDP growth of 7.71 percent for this year, backed by strong export performance.
The combination of reduced external risks and strong domestic economic indicators has helped restore investor confidence, suggesting Taiwan’s stock market could maintain its bullish momentum in the near term, particularly in the technology and electronics sectors, analysts said.