Index Plunges Over 1,600 Points Intraday
A US tech sell-off spread to Asia, leaving Taiwan stocks under heavy selling pressure on the 30th. The TAIEX opened down 228.54 points at 46,139.79 points, then losses quickly widened, with the index plunging over 1,600 points intraday to a low of 44,726 points, falling below the 45,000 mark. The TAIEX was last quoted at 44,859.09 points, down 1,509.24 points, or 3.25%.
Electronics Heavyweights Lead Decline, Index Breaks Below Half-Year Line
Weighed by a broad overnight decline in the four major US indexes and heavy selling in tech shares, with the Nasdaq and the Philadelphia Semiconductor Index both down over 1%, TAIEX futures in the night session also tumbled 643 points to close at 45,926 points. Electronics were the epicenter of the sell-off, with Delta Electronics (2308) and AUO (2409) both hitting limit-down, Nan Ya (1303) down 7.05%, Asia Vital Components (3017) down 3.06%, and market heavyweight TSMC (2330) down 2.07%, as risk aversion clearly increased and electronics dragged the broader market below its half-year moving average.
Ship Attacks Lift Freight Rates, Shipping Stocks Attract Funds
As electronics faced heavy selling, shipping stocks bucked the trend and attracted capital. Among the three major container liners, Wan Hai (2615) rose 1.3%, Evergreen Marine (2603) rose 2.87%, and Yang Ming (2609) rose 1.61%. The strength in shipping was linked to heightened tensions in the Middle East. Successive attacks on container ships and other vessels near the Strait of Hormuz have raised regional shipping risks, pushing up oil prices and shipping costs, while North America routes already at high levels stayed supported and helped Europe routes rebound. Container freight rates have now reached levels rarely seen outside the pandemic period, adding upside potential to shippers' fourth-quarter operations.
Durability of High Freight Rates Remains to Be Seen
The market sees the Middle East conflict raising carriers' costs for port changes, transshipment and vessel deployment, supporting high freight rates in the short term. With October rates staying elevated, revenues at the three major container liners are expected to keep growing, with logistics operators T3EX (2636) and Dimerco Express (5609) also likely to benefit. However, whether shipping shares can extend their gains will depend on developments in the conflict and global cargo demand. Analysts note weak European demand plus continued new vessel deliveries could limit further upside in freight rates. Large logistics operators believe a Trump-Xi meeting could extend the trade truce, and with congestion at US ports, US-bound freight rates are expected to stay elevated through late October.