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Taiwan Stocks Face Volatility as Quarterly Support Fades; Analysts Advise Deleveraging

Electronic Technology · Semiconductors · economic_daily · 2026-10-25

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Taiwanese equities are facing downward pressure as the index tests its quarterly support level, prompting analysts to recommend reduced leverage amid market uncertainty.

What Happened

Market Performance: The Taiwan Weighted Index saw a significant decline last week, dropping 1,069.83 points to close at 46,041.43. With the daily KD indicator falling below 20, analysts warn that the quarterly support level is weak and further consolidation may be necessary.

AI Sector Outlook: Despite short-term volatility driven by high interest rates and AI financing costs, the long-term outlook for AI infrastructure remains intact. The ramp-up of the Vera Rubin platform and growth in custom ASIC shipments are expected to support supply chain performance into next year.

Key Market Catalysts: Investors are closely monitoring upcoming US midterm election impacts and major tech earnings. The financial results from SK Hynix are particularly significant as they are expected to influence the broader memory sector's market sentiment.

Strategic Recommendations: While concerns regarding NeoCloud credit risks have surfaced, analysts suggest that the broader impact remains limited. Investors are advised to maintain a defensive stance, reduce leverage, and navigate the current volatility within a projected range of 45,000 to 48,000 points.

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