Taiwan stocks ended lower for a second straight session on Thursday, with the main index falling sharply as losses in technology and select semiconductor-related names outweighed gains in plastics and parts of the financial sector. The Taiwan Stock Exchange index dropped more than 1.5% and finished just below the 23,400 level, setting up expectations for another soft start on Friday.
Broader cues from Europe and the U.S. were also negative, with Wall Street sliding after early strength. Investors pointed to concerns around the near-term outlook for technology and chips, alongside U.S. economic signals that included higher-than-expected initial jobless claims.
Key takeaways
- Price move: Taiwan’s main index fell to 23,398.47, down 371.33 points (about 1.56%).
- Catalyst: Selling pressure concentrated in technology and semiconductor-linked stocks, in line with weak offshore market sentiment.
- Sector impact: Cement and technology weighed on the benchmark, while plastics posted gains and financials were mixed.
- Implication: With the index sitting just under 23,400, further pressure could emerge if global chip-related selling persists.
What drove the move
Trading on Thursday reflected a risk-off tilt, led by declines in technology and semiconductor names. Taiwan Semiconductor Manufacturing Company fell 2.43% and United Microelectronics shed 0.57%, while Hon Hai Precision dropped 3.77%. MediaTek declined 3.40%, and Delta Electronics was down 2.31%. Largan Precision also retreated 1.79%.
The selling was not uniform across the market. Plastics companies gained: Formosa Plastics rose 1.16%, Nan Ya Plastics added 0.60%, while shares of the plastics segment helped offset some of the losses from chip-related exposure. In other pockets of the market, financials finished mixed, with Cathay Financial down 1.68% and Fubon Financial declining 1.21%, while Mega Financial rose 2.03% and First Financial gained 1.38%.
Thursday’s declines in Taiwan came against a backdrop of weaker global market signals. According to reports referenced in the market summary, Wall Street’s earlier strength faded for much of the session, and the drop was linked partly to concerns over the near-term outlook for the technology sector.
Market reaction and offshore factors
The lead from the U.S. was negative after major indexes opened slightly higher and then moved deeper into the red. The Dow fell 533.06 points (about 1.29%) to 40,665.02, while the Nasdaq lost 125.70 points (about 0.70%) to 17,871.22. The S&P 500 declined 43.68 points (about 0.78%) to 5,544.59.
One cited driver for the U.S. weakness was heightened sensitivity to U.S.-China chip policy. The market read-through included concerns that the Biden administration is considering tougher trade rules impacting firms in its chip crackdown on China—an issue that followed a tech sell-off that began after reports emerged earlier in the week.
In addition, U.S. economic data added to the cautious tone. The Labor Department said initial jobless claims climbed more than expected last week, a signal that can influence investor expectations for growth and the Federal Reserve’s policy outlook. Separate regional and business surveys also showed mixed developments: the Federal Reserve Bank of Philadelphia reported that regional manufacturing growth was more widespread in July, while the Conference Board noted a modest decrease in its leading indicators reading for June.
Energy and the dollar weighed on sentiment
Oil prices eased slightly on Thursday, with West Texas Intermediate crude for August ending down $0.03 at $82.82 a barrel. The weakness was attributed in part to concerns about oil demand from China.
Meanwhile, the dollar’s recovery also weighed on commodities, contributing to the subdued tone in crude. For Taiwan-focused investors, the combination of softer oil demand expectations and a stronger currency backdrop can reinforce broad risk caution, especially when paired with technology and semiconductor-led volatility.
What to watch next
With Taiwan’s index hovering just below 23,400 following back-to-back declines, investors will likely watch whether technology and semiconductor selling persists at the open on Friday. Offshore direction remains a key factor, particularly any further policy headlines related to chips and China, as well as new signals from the U.S. labor market and upcoming macro releases. Energy prices and the dollar may also continue to influence risk appetite across regional markets.
