Hotter-Than-Expected Inflation Lifts Rate-Hike Odds
Taiwan stocks faced post-rebound lock-up release selling pressure on the 11th. Analyst Lin Hanwei said U.S. October CPI came in above market expectations, lifting the market-implied probability of a two-step rate hike in December to more than 50%, driving a simultaneous rebound in U.S. Treasury yields and the U.S. dollar. Technology stocks faced valuation pressure, especially continued declines in Nvidia, dragging on AI-related groups. Today's three key focuses are rate-hike expectations, foreign-investor positioning, and rotation among leading stocks.
Choppy U.S. Stocks as Philadelphia Semiconductor Holds Up Relatively Well
On Tuesday the four major U.S. indexes opened lower and fluctuated, as inflation data fueled market concerns about rate hikes. The Philadelphia Semiconductor Index fell 0.36%, holding up relatively better than other major indexes. Semiconductor stocks diverged, with Broadcom rising 3.91% and Coherent falling 4.64%. Tech giants came under pressure together, with Nvidia falling 5.47% and Microsoft falling 2.21%. Overall, the dollar rebounded, U.S. Treasury yields moved higher, most international oil prices closed lower, and market wait-and-see sentiment thickened.
Taiex Futures Fall in Night Session While TSMC Provides Support
Taiex futures fell 124 points, or 0.29%, in night trading, reflecting market caution. TSMC ADR rose 2.02%, rebounding for three straight days and becoming an important support for Taiwan stocks. TSMC futures rose NT$8 to NT$2,291 in night trading, reflecting record-high October revenue. Although TSMC ADR rebounded consecutively, foreign investors sold in the spot market for nine straight days and futures shorts hit a high, showing positioning remains bearish.
Funds Rotate to Thematic and Oversold Electronics Stocks
With positioning bearish, funds rotated into traditional industries and thematic concept stocks. Buying returned to shipping stocks Evergreen Marine, China Airlines, Wan Hai Lines, and EVA Air. Green energy stocks Canghe, Gigasolar, United Renewable Energy, and Motech continued to move higher. Low-earth-orbit satellite stocks Compeq, Transcom, WIN Semiconductors, and Wistron NeWeb attracted stronger buying. October revenue stocks Chaintech, Teh Hong, Chander, and Taiji posted strong results. Robotics stocks Gaoqiao, Mirle, Tongtai, and Takisawa Tech strengthened on theme trading. Electronics stocks were mainly oversold rebounds, with substrate stocks Unimicron, Kinsus, Zhen Ding-KY, and Nan Ya PCB rebounding from lows, while PCB stocks Fuqiao, Gold Circuit Electronics, Nan Ya Plastics, and Taiwan Glass rebounded together.
Institutional Positioning and Sector Outlook
Investment-trust-supported stocks Accton, AP Memory, Kaori, and VPEC warrant watching for subsequent institutional positioning changes. Memory stocks Nanya Technology, Winbond, PSMC, and Phison will track Korean market trends. Passive components Prosperity Electric, Holy Stone, Walsin Technology, and Yageo consolidated at lows. IC design benchmarks are MediaTek, Global Unichip, Alchip-KY, and ESMT. Silicon photonics stocks LandMark, LuxNet, Browave, and Shangquan diverged. AI server stocks InWin Enterprise, Auras, King Slide, and Asia Vital Components played catch-up. Software stocks Syscom, Hua Hong Information, Smart Link Service, and Metaage remain in focus for buying momentum.