FX.co ★ Renewed Selling Pressure Expected For Taiwan Shares

The Taiwan stock market has experienced fluctuations over the past week following the conclusion of a five-day winning streak that saw it rise more than 750 points, or 3.8 percent. Currently, the Taiwan Stock Exchange (TSE) is positioned just above the 21,550-point mark. However, indications suggest a likely downturn on Thursday.

Global market sentiment, particularly in Asian markets, appears negative due to concerns over the outlook for interest rates. Both European and U.S. markets saw declines, which is expected to influence Asian markets similarly.

On Wednesday, the TSE finished significantly higher, powered by gains in financial and technology sectors, while the plastics and cement sectors displayed mixed results. Specifically, the index climbed 315.08 points, or 1.48 percent, to close at 21,551.83 after fluctuating between 21,248.99 and 21,567.48.

Prominent performers among the active stocks included Cathay Financial, which climbed 1.08 percent, and Taiwan Semiconductor Manufacturing Company, which surged 2.73 percent. On the other hand, Mega Financial saw a slight decline of 0.12 percent, and Nan Ya Plastics dropped 2.15 percent.

Wall Street offered a weak lead, with the major indices showing mild gains in the first half of Wednesday before slipping into negative territory. The Dow Jones Industrial Average fell by 201.95 points, or 0.51 percent, to close at 39,671.04. The NASDAQ Composite decreased by 31.08 points, or 0.18 percent, to finish at 16,801.54, and the S&P 500 declined by 14.40 points, or 0.27 percent, to end at 5,307.01.

The downturn in U.S. markets was linked to the release of the Federal Reserve's minutes, which indicated that officials anticipate maintaining the current interest rates longer than previously expected. Discussions noted disappointing inflation readings and strong economic momentum in the first quarter. While there were considerations for easing policy if labor market conditions weaken unexpectedly, officials expressed readiness to raise rates further if inflation risks materialize.

Oil prices also saw a decline, reaching a two-month low after an unexpected increase in U.S. crude oil inventories. West Texas Intermediate crude oil futures for July dropped by $1.09, or 1.4 percent, settling at $77.57 per barrel.

Locally, Taiwan will release April data for industrial production today. In March, industrial production had increased by 3.99 percent year-on-year.