The Taiwan stock market has experienced a series of alternating gains and losses over the past five trading sessions, following a two-day downturn during which it declined by almost 360 points, equivalent to a 1.5% drop. Currently, the Taiwan Stock Exchange is positioned just below the 23,170-point mark, with expectations of further consolidation anticipated on Thursday.
The outlook for Asian markets indicates significant consolidation, largely influenced by concerns over future interest rate trends. While European markets remained relatively stable and mixed, U.S. markets saw a sharp decline, which is likely to set the tone for Asian markets as well.
On Wednesday, the Taiwan Stock Exchange closed slightly up, despite advances in the technology and plastics sectors being offset by losses within the financial sector. The index increased by 150.66 points, or 0.65%, to close at 23,168.67, fluctuating between a low of 22,934.59 and a high of 23,211.17 throughout the day.
Key financial movements included Cathay Financial rising by 0.29%, Mega Financial dipping by 0.89%, CTBC Financial ticking up by 0.16%, First Financial falling by 1.26%, Fubon Financial dropping 0.65%, and E Sun Financial declining 0.73%. Taiwan Semiconductor Manufacturing Company gained 0.93%, United Microelectronics Corporation leapt 2.70%, Hon Hai Precision improved by 0.82%, Largan Precision increased 2.18%, Catcher Technology rose 1.98%, Delta Electronics strengthened by 1.43%, Novatek Microelectronics surged 2.50%, Formosa Plastics climbed 3.67%, Nan Ya Plastics ascended 1.06%, and Asia Cement edged up 0.12%.
In contrast, U.S. markets experienced a steep downturn. The major indices started flat on Wednesday but plunged sharply following the Federal Open Market Committee’s announcement on interest rates. The Dow dropped 1,123.03 points, or 2.58%, to settle at 42,326.87. The NASDAQ fell 716.37 points, or 3.56%, ending at 19,392.69, while the S&P 500 shrank by 178.45 points, or 2.95%, closing at 5,872.16.
This decline was triggered by the Federal Reserve’s announcement of a widely anticipated quarter-point interest rate reduction. More crucially, it forecast fewer rate cuts for the upcoming year than previously anticipated. The interest rate is now projected to range between 3.75% and 4.0% by the end of 2025, in contrast to the earlier forecast of 3.25% to 3.50% as projected in September. These projections suggest just two rate cuts next year, rather than the previously expected four, as Fed officials anticipate higher inflation in 2025 than initially estimated.
On a brighter note, crude oil prices saw an uptick on Wednesday, rebounding from recent declines. This was due to data highlighting a reduction in crude inventories alongside a rise in gasoline stockpiles last week. West Texas Intermediate Crude oil futures for January closed with an increase of $0.50, or 0.71%, settling at $70.58 per barrel.
Meanwhile, Taiwan's de facto central bank is set to announce its decision on interest rates later today. It is widely expected that the lending rate will be maintained at a steady 2.00%.
The material has been provided by InstaForex Company -
www.instaforex.com
