Taiwan Stock Market: Cautious Trading Ahead of Lunar New Year
Preface
The Taiwan stock market has experienced fluctuations following the opening of 2025, with investor sentiments turning cautious. Last week, the market dropped by 367 points, turning the weekly trend negative. Analysts note that multiple uncertainties need clarification in the upcoming week, such as the FOMC meeting minutes and key industry events. Despite individual stocks showing potential, the overall market momentum remains unstable.
Lazy bag
Key takeaways: The Taiwan stock market faces uncertainties with factors like FOMC minutes and CES event. Market momentum remains cautious.
Main Body
The Taiwan stock market began 2025 with a lackluster performance, as investor enthusiasm dwindled and the market ended the week down by 367 points. This performance reversed the previous week's gains and raised concerns among market participants. According to analysts, several critical events coming up this week could impact market dynamics. These include the Federal Open Market Committee's (FOMC) minutes set to be released and the highly anticipated CES event, where tech giants will showcase upcoming trends.
Additionally, the imminent investor conference by Largan Precision (3008-TW) is set to draw attention. The potential revelations during these events could influence specific stocks, yet the overall market aggressiveness is not stable, suggesting traders adopt a 'sell on strength' approach.
Last week, foreign investors were net sellers, offloading over NT$432 billion in the Taiwan market. Significant sell-offs were observed in leading companies such as TSMC (2330-TW), with NT$120 billion, Foxconn (2317-TW) with NS58 billion, and MediaTek (2454-TW) with NT$43 billion. These actions exerted pressure on the market index, reflecting the hesitance among international investors.
Local traders highlight the potential impact of policy uncertainties as the new U.S. administration prepares to take office on January 20. Market reactions have fluctuated between concerns over possible high tariffs and optimism about preemptive action against tariff impacts, compounded by limited room for further rate cuts from the Federal Reserve.
The approaching Lunar New Year also suggests a likely lack of extended market rallies. The focus of the upcoming CES event includes speeches and product launches by notable figures like Nvidia's Jensen Huang, promising new incentives in the AI sector. Sinopac Securities advises monitoring these developments as indicators of potential market shifts.
Furthermore, based on rises in U.S. Treasury yields and the dollar index, there's a prevalent market anxiety regarding proposed policies by the new U.S. administration. This sentiment is expected to persist until specific policy actions are clear and may affect emerging markets.
Sinopac further warns about the rumored 25 executive orders anticipated to be issued on the U.S. President's first day, which could lead to market adjustments if tariffs escalate. The prospect of non-U.S. currencies facing unfavorable conditions also arises, underlining the importance of cautious capital movements.
Attention also turns to Largan Precision's investor conference on the 9th, where their historically cautious communication style may temper expectations for sectors lacking shipment momentum, notably impacting optical module themes.
Key Insights Table
| Aspect | Description |
|---|---|
| Key Fact 1 | The Taiwan stock market dropped 367 points last week, influenced by market uncertainties. |
| Key Fact 2 | Upcoming FOMC minutes and CES event are key factors impacting market sentiment. |