RISE AND SHINE:
The TAIEX has gained 25.32% this year, outpacing the MSCI Asia Pacific Index, while the latest advance erased all of its losses since the start of the war
Taiwanese stocks yesterday rose to a new record as investors returned to the pre-Iran war trading theme of chasing artificial intelligence (AI) shares amid hopes for easing tensions in the Middle East.
The TAIEX yesterday closed up 838.83 points, or 2.37 percent, at 36,296.12, boosted by index heavyweight Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which rose 2.37 percent to a new high of NT$2,055. Meanwhile, the New Taiwan dollar rose NT$0.095 to close at NT$31.69 against the US dollar.
Other Asian stocks also moved higher yesterday, tracking Wall Street gains, with Japan’s Nikkei 225 rising 2.43 percent to 57,877.39, while South Korea’s KOSPI jumped 2.74 percent to 5,967.75 after briefly topping 6,000 intraday. Hong Kong’s Hang Seng Index rose 0.7 percent, while the Shanghai Composite Index climbed 1 percent and Australia’s S&P/ASX 200 gained 0.5 percent.
Photo: CNA
Taiwan’s benchmark has gained 25.32 percent so far this year, outpacing the MSCI Asia Pacific Index’s nearly 10 percent increase. The latest advance helped the TAIEX erase all its losses since the war started at the end of February, when global AI stocks were battered due to concerns about soaring energy costs and supply disruptions.
Singaporean equities have also erased their declines, while China is less than 1 percent away, Japan within 2 percent, Australia and Hong Kong about 3 percent, and South Korea about 4.4 percent below prewar levels.
Hopes of a US-Iran deal were raised after US President Donald Trump said overnight that Tehran had “called” to say “they would like to work to a deal,” prompting buying from investors in the region, including Taiwan, Moore Securities Investment Consulting Co (摩爾投顧) analyst Adam Lin (林漢偉) said.
“With the TAIEX repeatedly hitting highs, many investors believed the worst of the impact from the Middle East tensions is over,” Lin said. “As long as crude oil prices turn stable, the US markets continue to move higher and the local index will follow.”
As signs are emerging that another round of ceasefire negotiations could be under way, confidence is building in financial markets that a deal remains within reach and that energy flows will stabilize, allowing investors to refocus on growth and corporate earnings.
“As the Iran deal hopes improve, markets will refocus on earnings growth and AI,” Syfe Pte Ltd investment head Ritesh Ganeriwal said. “Taiwan will continue to benefit given its dominant position in the AI supply chain.”
TSMC’s gains came after the sole chipmaker for Nvidia Corp’s advanced AI accelerators reported a 35.1 percent annual increase in first-quarter revenue last week, suggesting global AI chip demand remained intact during the first weeks of the Iran war.
Revenue for the first three months of the year rose to NT$1.13 trillion, a record high. TSMC is scheduled to report full first-quarter earnings on tomorrow.
“With the rapid growth trajectories we are seeing from Anthropic, OpenAI and other leading AI developers, many of those doubts have faded,” M&G Investments Asian equities portfolio manager Vikas Pershad said. “Key bottlenecks have tightened meaningfully, and many of the most critical points in the value chain continue to sit in Taiwan.”
Additional reporting by CNA
