On the first day, Taiwan’s stock market quickly rotated under the pullback of US technology stocks, maintaining a high-level volatile trend. It closed up 4 points at 17,438 points with a trading volume of NT$303.3 billion. The weekly line has been rising for five consecutive weeks. Institutional investors pointed out that Taiwan’s stock market continued its upward trend, and the short-term and medium-term moving averages on the technical side were in a bullish arrangement. The sector maintained a rotational pattern, and there have been multiple tests of support at the 5-day moving average recently. With the unchanged bullish structure and all four major US indices closing higher last Friday, it is expected to help support Taiwan’s stock market to continue its upward momentum.
The weighted index opened slightly lower by 11 points on the first day but jumped after an opening gap due to a correction in AI concept stocks, dragging down the index by more than 70 points at one point to test the short-term moving average and fall below the key level of 17,400 points. Fortunately, supported by strong performances from traditional industries such as shipping, biotechnology and medical care, papermaking etc., which led to convergence in point decline for the index. On the market surface, blue-chip stocks saw both rises and falls; TSMC (2330) and MediaTek (2454) closed slightly higher while Hon Hai Precision Industry Co., Ltd (2317) fell over 1%. Shipping companies continued their upward trend with bulk carriers China Airlines (2612) and Yang Ming Marine Transport Corp (2606) leading gains. The overall market turned red with a slight increase of 4 points at closing reaching 17，438.
Regarding recent trends in Taiwan’s stock market，the team from Allianz Global Investors stated that there is already considerable consensus benefiting from positive factors such as expectations that inventory adjustments will end soon、demand recovery next year and the US Federal Reserve’s interest rate cuts. This atmosphere helps support market confidence in holding stocks. Under the rapid rotational pattern of sector performance, various types of stocks, including blue-chip stocks, have shown good performance, which also supports Taiwan’s stock market to maintain a high-level volatile pattern.
In terms of international situations, changes in market interest rates are an important variable affecting the current stage of the US stock market. Changes in consumer price index are one of the key factors influencing market expectations for interest rate trends; if December inflation data can further show easing inflationary pressures, there is a chance for further gains in the US stock market and thus driving Taiwan’s stock performance.
Regarding thematic aspects，the team from Allianz Global Investors pointed out that November’s rise in Taiwan’s stock market can be attributed to better-than-expected third-quarter earnings reports and assistance from the US stock market. However, the key lies in industrial inventories having adjusted to relatively low levels with positive expectations for next year; The rotation among sectors stems from differences in inventory adjustment rhythms: downstream industries performed better than upstream ones during H1 this year while Q4 was driven by upstream industries. It is expected that this phenomenon will continue.
The team from Allianz Global Investors stated that when examining recent rotational themes it can be observed that due to partial benefits from January effects electronic companies above game operators have performed well with semiconductors and electronic components being favored by investors；AI-related stocks have had mediocre performances recently due to chip-side adjustments but long-term investors who buy on dips are still present.
In addition, regarding traditional industry stocks，recent trends in USD exchange rates have supported food and construction shares。Furthermore，shoe manufacturing、textile industries which turned towards growth prospects next year also showed good performances；Overall，the trend of the overall index tends towards consolidation patterns。Apart from existing growth stocks，sectors with lower base periods are expected to perform better.