TAIPEI (Taiwan News) — The Taiwan stock market will refocus on fundamentals following the US presidential election, with industries such as finance, petrochemical energy, and cryptocurrency likely to benefit, analysts believe.
The Taiwan stock market has already begun to react to a “Trump trade,” Taishin Securities General Manager Fan Chen-hung (范振鴻) observed. Given Trump's victory and considering historical precedent, Fan suggested that a potential tax cut could boost the stock market, per CNA.
US stock futures rallied sharply around 10 a.m. Wednesday (Nov. 6). This positive sentiment extended to the Taiwan stock market, with Taiwan Semiconductor Manufacturing Co. (TSMC) leading the charge.
Although Trump previously voiced concerns about Taiwan’s semiconductor industry and suggested imposing fees on TSMC, Fan said these statements require closer observation. Since TSMC primarily operates as a contract manufacturer, any additional taxes would likely be passed on to US clients, ultimately shifting the financial burden to them.
Compared to Japanese stocks and US stock futures, the Taiwan stock market's performance on Wednesday was relatively muted, driven primarily by gains from TSMC. Fan cautioned investors that Trump's past rhetoric could continue to create psychological pressure on the Taiwanese market.
The market may need time to adjust to developments in the coming days. It's important to monitor the situation closely, Fan commented.
CTBC Investments suggested the US election could result in certain stocks benefiting and others being negatively impacted due to differing policy stances between the Democratic and Republican parties. However, it believes the long-term growth of the AI and semiconductor industries is likely to continue, regardless of the election outcome.
Cathay Securities Investment Consulting manager Tsai Ming-han (蔡明翰) attributed the third-quarter decline in US and Taiwanese stocks primarily to concerns over a potential US economic recession and overvalued AI stocks. However, based on several economic indicators, Tsai believes the US economy remains resilient.
Additionally, recent capital expenditure plans announced by the four major US cloud service providers indicate a continued acceleration of AI investments, temporarily easing related concerns. As the US election concludes and uncertainties diminish, the stock market is expected to resume an upward trend.
