Taiwan Stocks Open High and Turn from Gains to Losses
Taiwan stocks plunged 1612.6 points yesterday, falling below the 44,000-point mark. Today the weighted index opened at 43449.45 points, rising as much as 419.52 points in early trading to 43727.06 points, before selling pressure emerged and turned from gains to losses, last quoted at 43209.71 points, down 97.83 points or 0.23%, retreating over 500 points from the intraday high. The OTC index also opened high and moved low, once climbing to 349.17 points in early trading before quickly turning negative, last quoted at 344.56 points, down 0.28%, showing selling pressure on small- and mid-cap stocks has not eased.
U.S. Midterm Elections and U.S.-Iran Conflict Drive Safe-Haven Sentiment
Results of the U.S. midterm elections have been unveiled successively, with control of Congress and subsequent policy direction affecting market sentiment, while renewed escalation of the U.S.-Iran military conflict has further intensified market safe-haven sentiment. According to the Associated Press, the U.S. military recently launched limited airstrikes against targets near the Strait of Hormuz in Iran, and Trump has also not ruled out further military action. Although both sides continue negotiations, the risk of conflict escalation has not been removed. U.S. stock futures weakened in electronic trading, with Dow futures down about 0.4%, S&P 500 index futures down 0.65%, and Nasdaq 100 index futures down 1.3%. Despite AMD earnings and guidance beating expectations, it was still hard to offset policy uncertainty and valuation concerns over technology stocks, and the rebound in Asian semiconductor stocks came under pressure.
Asian Stocks Volatile as Japanese Stocks Play Catch-Up with Plunge of Over 1,000 Points
Asian股市 were weak this morning. Korea's KOSPI index once rose over 1.5%, then turned negative, down 22.47 points or 0.4%, last quoted at 5626.32 points, with a swing of over 3 percentage points. Japanese stocks resumed trading today after being closed yesterday for Culture Day, playing catch-up on the downside, with the Nikkei 225 index down 1422.2 points or 2.25% intraday, last quoted at 61659.64 points; the TOPIX index fell about 1.16%, last quoted at 3884.87 points. Among memory names, Korea's Samsung Electronics and SK Hynix saw gains narrow, up 0.91% and 1.65% respectively, last quoted at 221500 Korean won and 1421000 Korean won; Japan's Kioxia plunged 8.29%, last quoted at 10405 yen, showing Asian semiconductor stocks have not yet fully stabilized.
Sharp Drop in Margin Financing; Institutions Expect Short-Term Volatility
After Taiwan stocks plunged yesterday, margin positions contracted заметно. Listed margin balances fell to 5997.74亿元, down 229.25亿元 in a single day; OTC margin balances fell 78.47亿元 to 1965.63亿元, for a combined listed and OTC decline of 307.72亿元. In addition, the overall market maintenance ratio fell from 173.62% on the previous trading day to 165.53%, down 8.09 percentage points. As declines in individual stocks intensified, some margin account holders face margin-call pressure, and forced selling may be triggered if collateral cannot be replenished in time. Yao Zonghong, head of the Domestic Investment Department at Eastspring Investments Taiwan, pointed out that the U.S. midterm elections may present three scenarios: if Republicans and Democrats each control one chamber of Congress, policy checks and balances would have limited impact on the market; if Republicans retain control of both chambers, policy continuity would improve, leaning bullish in the short term, but inflation and interest-rate changes must be watched; if Democrats take both chambers, there may be short-term concerns that tighter AI regulation will pressure technology stocks, while greater checks and balances over the medium to long term may reduce geopolitical, oil-price and inflation risks, not ruling out short-term weakness but long-term strength. He believes the market is focused on interest-rate trends, corporate cash flows and financing costs, Taiwan corporate fundamentals remain supportive, but short-term chips need to settle, expecting continued volatility, and watching whether U.S., Japanese and Korean股市 can stabilize.