Highlights

Last week, Taiwan's benchmark index rose by 241 points, ending a three-week losing streak. However, investor enthusiasm was lukewarm following the NVIDIA GTC conference, failing to sustain gains above the annual line. The market's apprehension grows as the U.S. may list Taiwan among the 'Dirty 15' nations. Cautious vigilance continues as traders await definitive trade policy revelations. Any confirmed tariff hike could potentially trigger volatility.

Sentiment Analysis

• The prevailing sentiment is one of caution and concern, reflecting anxieties over potential U.S. trade actions.
• Traders express vigilant optimism, mindful of historical precedents regarding tariff flexibility.
• Market responses are currently mixed in anticipation of solidified trade policies to dictate future trends.

Article Text

The Taiwan stock market witnessed a rebound last week, with the weighted index climbing 241 points. Despite this recovery halting a series of weekly market declines, the optimism was subdued as the focus shifted from NVIDIA's GTC conference to broader geopolitical dynamics. The market struggled to break above the key annual line resistance, echoing sentiment concerns over Taiwan's potential inclusion in a group referenced by former U.S. President Trump as the 'Dirty 15'. These countries could face reciprocal tariffs by April 2.

Market analysts, particularly traders, speculate that the forthcoming U.S. tariff implementations could severely impact Taiwan alongside other major Asian trading partners such as China, Japan, and South Korea. Until the full details of the tariff policies are disclosed, prevailing ambivalence may underscore resistance to upward momentum in the market. Should tariffs be moderate or unclear, the market might experience a short-term recovery.

Traders advise investors not to succumb to undue pessimism. Historically, trade policies have often served as leverage for negotiations, with some flexibility expounded by Trump on reciprocal tariffs. Financial activity reveals substantial foreign net selling, exemplified by a significant 448 billion NT sell-off in the concentrated market last week. Notably, leading tech firms like Hon Hai (2317-TW) and Taiwan Semiconductor Manufacturing Company (2330-TW) saw heavy selling, though figures have slightly moderated amid pending tariff developments.

Yuanta Securities alludes to the NVIDIA GTC conference garnering less investor excitement than previous iterations. NVIDIA's stagnant stock performance reflects a broader adjustment among AI-related shares, hinting at potential realignments ahead. Given the looming tariff decisions and a cooling off of major stocks, Taiwan's market appears prudently cautious, particularly since the main index hovers below the pivotal annual line of 22,304 points.

Key Insights Table