UPTICK:
The Fed’s dovish message on interest rate hikes and signs that technology inventory corrections have come to an end should lend support to the local bourse
By Crystal Hsu / Staff reporter
The TAIEX might consolidate with a positive bias after Double Ten National Day, as local tech firms emerge from inventory adjustments while investment demand from mutual funds and local life insurers remains strong, analysts said, while downplaying the impact of Hamas’ attack on Israel.
Economic fundamentals should lend support to the local bourse this quarter when the year-long inventory corrections come to an end, First Capital Management Inc (???????) said in a note.
Laptop makers have completed inventory adjustments and selling prices for memory chips have stabilized, it said.
Photo: Cheng I-hwa, Bloomberg
Furthermore, US graphics processing unit vendor Nvidia Corp has secured vital capacity to fill orders, allowing its Taiwanese supply-chain firms to ramp up production, it added.
Taishin Securities Investment Advisory Co (????) said that global financial markets have over the past two days assigned more importance to dovish statements on interest rate hikes from US Federal Reserve officials than the surprise conflict in the Middle East.
In Asian trading yesterday, Japan’s Nikkei 225 rallied 2.43 percent while Hong Kong’s Hang Seng Index picked up 0.84 percent. India’s Sensex advanced 0.9 percent, Australia’s S&P/ASX 200 rose 1 percent and Thailand’s SET gained 0.2 percent, while China’s Shanghai Composite Index was down 0.7 percent and South Korea’s KOSPI slipped 0.3 percent.
Taiwan’s bourse is likely to copy the uptick today after investors return from the holiday, Taishin Securities said.
The upcoming earnings season would dominate investment sentiment and the landscape should look brighter, Capital Investment Management Corp (????) said.
Smartphone camera lens maker Largan Precision Co (???) is to hold an investors’ conference tomorrow and Taiwan Semiconductor Manufacturing Co (???) is to hold its conference on Thursday next week.
The National Financial Stabilization Fund is due for a quarterly meeting today and members are to discuss global economic issues that might affect the TAIEX, said Deputy Minister of Finance Frank Juan (???), the fund’s executive secretary.
Juan attributed the local bourse’s earlier rout to jitters over further monetary tightening by the US and a potential second wave of inflation.
As a result, global funds pulled out of emerging markets, including Taiwan, he said.
In addition, Taiwan is today to release last month’s export data, which have a fair chance of reversing the year-long contraction thanks in part to a low base last year, the Ministry of Finance said earlier.
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