Highlights

Despite the upcoming holidays, Taiwan's stock market remains bullish, surging 382 points last Friday and 1180 points over the week. This robust rise positions it close to the 27,000 mark. The continuous leadership of TSMC drives market momentum. Caution is advised due to U.S. market behaviors that might introduce risks.

Sentiment Analysis

• Investors are largely optimistic with notable foreign capital inflow even amid concerns like the U.S. government shutdown.
• The purchase of large electronic stocks by foreign investors is significant, suggesting confidence in long-term growth.
• Progress bar reflects a predominantly positive sentiment:

Article Text

The Taiwan stock market is riding a bullish wave despite looming holidays, showing an impressive upward trend by surging 382 points last week and a cumulative rise of 1180 points, approaching the significant 27,000 benchmark. The driving force behind this rally is TSMC (2330-TW), whose continual advances bolster the overall market, potentially spurring sector rotations and subsequent gains. Importantly, there are no formidable adverse factors currently impacting the market, although vigilance is advised in light of the U.S. stock market's typical behavior where rapid increases can lead to downturns.

Despite the looming possibility of a U.S. government shutdown, investors seem unfazed, leading to a consistent rise in U.S. stock markets. This trend has encouraged foreign investors to actively purchase Taiwanese stocks, resulting in a considerable net buying of NT$59.6 billion in the central market last week, highlighting foreign investors as pivotal drivers of Taiwan's market movement.

The focus of foreign capital has been on major electronic stocks, such as TSMC with a purchase volume of NT$18.8 billion, Quanta Computer (2382-TW) with NT$11.1 billion, and Wistron (3231-TW) with NT$10.2 billion, among others. Meanwhile, investment trusts have been observed to sell-off, indicating a more cautious stance as they seem to capitalize on high valuations.

According to market participants, the period known as Golden October in Taiwan suggests sustained bullishness, warranting continued investment with a positive outlook. Notably, there is a tendency among market players to hoard stocks, evidenced by the previous week's surge of nearly 1,200 points, despite a reduction in turnover from NT$509.2 billion on September 26 to NT$478.6 billion on October 3. This highlights a reluctance to sell, though it may also signal accumulating profit-taking risks if liquidity is not effectively redistributed.

Key Insights Table