Taiwan Stocks Fall Below Quarterly Line on Fed Hold, Tech Earnings

Taiwanese stocks faced heavy correction pressure today, with the intraday index plunging by more than 800 points at one point. The decline was not only sharp, but it also directly breached the quarterly moving average, which serves as a watershed indicator for medium-to-long-term bull and bear markets. The trigger for this correction primarily stemmed from the U.S. Federal Reserve's recent announcement to keep interest rates unchanged in its latest monetary policy decision, leaving market capital still concerned about the tightening direction of future monetary policy. At the same time, investors are still deeply digesting the recently released financial reports and future outlooks of global tech giants. Driven by a shift toward a more conservative atmosphere in international stock markets, heavy selling pressure emerged immediately in early trading on the Taiwan stock market. Weighty stocks stalled across the board, causing the benchmark index to open lower and trend downward, while market sentiment turned wait-and-see and cautious.

A closer examination of today's market structure reveals that heavy-weight stocks became the main target for profit-taking in this pullback, particularly the electronics and semiconductor sectors, which have long served as the pillar of the Taiwan stock market. As U.S. tech stocks recently faced high-level volatility and financial report scrutiny, market noise regarding the sustained growth momentum of certain artificial intelligence-related concept stocks directly impacted confidence in the Taiwanese supply chain. Major heavyweight stocks such as Taiwan Semiconductor Manufacturing Company, MediaTek, and Largan Precision encountered heavy selling shortly after the market opened. The index subsequently lost psychological milestones and further breached the quarterly moving average support at approximately 46,502 points, indicating that short-term technical aspects have loosened and the bullish defense line has been forced to retreat.

It is worth noting that while heavyweight stocks in the main board faced comprehensive sell-offs, market capital briefly attempted to pivot into small and medium-sized thematic stocks for shelter. The GreTai Securities Market index, which represents the performance of small and medium-sized stocks, initially demonstrated counter-trend resilience at the open and even briefly surged, attracting some domestic capital and short-term speculative funds. However, as selling pressure on the main board continued to expand and the index's decline deepened, market panic gradually spread across the entire market. Ultimately, the GreTai index could not withstand the drag from the weakening broader market, subsequently turning from positive to negative and failing to escape a weak finish. This demonstrated that market willingness to chase prices was weak, leaving the market devoid of effective counter-trend leadership.

From the perspective of macroeconomic and international financial environments, the U.S. Federal Reserve's latest interest rate trajectory remains the core variable affecting global capital markets. Recent messages released by Federal Reserve officials indicate that the mission to fight inflation is not yet fully complete, and the timeline for rate cuts may not be as optimistic as previously expected by the market. This expectation of "higher rates for longer" continues to exert valuation pressure on global risk assets. As a highly outward-oriented market, the Taiwan stock market is extremely susceptible to international capital flows. When U.S. Treasury yields remain relatively high and foreign institutional investors simultaneously execute adjustments in both the TAIEX futures and cash markets, the domestic stock market naturally bears immense pressure for capital outflow and valuation correction.

Looking ahead to the subsequent market development, whether the Taiwan stock market can rapidly stabilize and reclaim the moving average after losing the quarterly line will depend on changes in several key factors. First is whether the subsequent financial reports of U.S. tech giants and their guidance on fourth-quarter industry conditions can inject a shot of confidence into the market. Second is whether foreign investors' net selling in the Taiwanese cash market can converge. Finally, it depends on whether the actual October revenue performance of domestic listed companies can demonstrate fundamental support. During this transitional period of turbulent international variables and weakening technicals, investors should closely monitor the settlement of capital chips, strictly control fund risks, and avoid blindly chasing highs or panic-selling.