FX.co ★ Renewed Consolidation Expected For Taiwan Stock Market

The Taiwan stock market demonstrated a renewed upswing on Monday, recovering from a pause in its recent rally where it had previously gained over 1,000 points, or 4.3%. Currently, the Taiwan Stock Exchange index is positioned just below the 23,275-point threshold, with expectations of a downward adjustment anticipated for Tuesday.

The outlook for Asian markets appears subdued, largely due to the weakness in technology stocks and the anticipation of critical U.S. inflation data set to be released later this week. European markets presented mixed results, while the U.S. indices experienced declines. As a result, Asian markets are likely to show mixed performance as well.

The TSE posted a modest gain on Monday supported by financial shares, while technology and plastics sectors displayed uneven results. Specifically, the index added 79.98 points or 0.34%, concluding the session at 23,273.25 after fluctuating between 23,172.22 and 23,325.99 points.

Notable performances among active stocks included Cathay Financial, which gained 0.73%, First Financial increased by 0.36%, Taiwan Semiconductor Manufacturing Company advanced 0.94%, and United Microelectronics Corporation saw a rise of 1.26%. Conversely, Hon Hai Precision decreased by 1.52%, Largan Precision fell by 1.81%, and Catcher Technology dipped 0.25%. Meanwhile, MediaTek improved by 1.53%, Delta Electronics by 1.50%, and Formosa Plastics by 0.12%. On the downside, Nan Ya Plastics fell 1.60%, Asia Cement was down 0.47%, and several financial stocks remained unchanged.

The negative lead from Wall Street saw major averages open mixed on Monday, swiftly declining and maintaining a downward trajectory throughout the day. The Dow Jones Industrial Average declined by 240.59 points or 0.54%, closing at 44,401.93. The NASDAQ Composite fell by 123.08 points, or 0.62%, to finish at 19,736.69, and the S&P 500 dropped 37.42 points, or 0.61%, ending at 6,052.85.

A downturn in Nvidia's shares impacted the markets, with a 2.6% drop attributed to news of a Chinese regulatory investigation into potential antimonopoly violations by the chipmaker.

Further weakness in U.S. markets stemmed from anticipation regarding the upcoming U.S. inflation data, which is closely monitored by traders. Although the Federal Reserve is broadly expected to cut rates by another 25 basis points in the coming week, uncertainty remains regarding the central bank's rate path for the subsequent year.

In the commodities market, oil prices increased amidst geopolitical tensions and optimism about potential monetary policy easing by China’s central bank to stimulate economic growth. West Texas Intermediate Crude oil futures for January rose by $1.17, or 1.74%, settling at $68.37 per barrel.