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US Market Rebound Offers Relief for Taiwan Stocks Seeking to Reclaim 5-Day Moving Average
Electronic Technology · Semiconductors · economic_daily · 2026-09-04
Following a massive sell-off, Taiwan stocks look to stabilize as US markets end a three-day losing streak and AI demand remains robust.
What Happened
Market Volatility and US Recovery: The Taiwan stock market suffered a significant 784-point drop yesterday, driven by geopolitical tensions and inflation fears, with foreign investors offloading over NT$91 billion. However, a rebound in US markets, fueled by easing tensions in the Middle East and dovish comments from Fed officials, has provided a much-needed buffer for local equities.
AI Growth and M&A Speculation: Reports suggest Nvidia is in talks to acquire AI startup Hugging Face for approximately $14 billion, signaling a major strategic expansion. Meanwhile, TSMC executives confirmed that AI-related equipment demand has doubled in the last six months, underscoring the sustained long-term growth potential for the AI hardware sector.
Technical and Institutional Outlook: Technical indicators, including the daily KD and MACD, suggest a cooling of bullish momentum, making the recovery of the 5-day moving average a critical short-term hurdle. With foreign investors increasing their net short positions in index futures and the currency market remaining volatile, institutional sentiment remains cautious.
Investment Strategy: Investors are advised to adopt a 'buy on dips' approach rather than chasing rallies, focusing on high-liquidity, large-cap AI stocks. Long-term opportunities remain in advanced packaging, optical transmission, thermal management, and high-dividend financial stocks, provided investors remain vigilant against short-term market fluctuations.