Positive Sentiments Spotted for Taiwan's Stock Market
Taiwan's Economy and Stock Market: Strong Growth with Potential Slowdown
Taiwan's economy is currently experiencing strong growth, driven by export momentum and the technology sector. The Taiwan Stock Exchange (TSE) has reflected this optimism, particularly in June 2025, influenced by demand in AI, high-performance computing, and cloud-related services.
The Taiwanese economy's GDP growth forecast for 2025 has been revised upwards to around 3.0–4.0%, primarily due to export surges in the first half. These surges were driven by front-loading orders to avoid US tariffs established during Trump’s administration. However, exports are expected to slow markedly in the second half of the year, declining from above 20% growth early in the year to around 2.5–6.7%.
The technology sector, especially AI-related exports, has been a key driver of economic resilience and stock market performance. Service and construction sectors have also improved, helped by seasonal travel and infrastructure projects, boosting overall market sentiment.
However, the appreciation of the New Taiwan Dollar has negatively impacted some domestic company revenues when converted, affecting manufacturing outlook despite strong sector demand.
The TSE finished sharply higher on Wednesday, with the index rallying 260.20 points or 1.12 percent to finish at 23,461.72. Key performers included MediaTek, which strengthened 1.47 percent, and Formosa Plastics, which skyrocketed 9.92 percent. Catcher Technology gained 0.47 percent, while United Microelectronics Corporation shed 0.58 percent. Largan Precision climbed 1.08 percent, and Delta Electronics advanced 0.95 percent. Asia Cement rallied 1.00 percent, and Nan Ya Plastics surged 7.95 percent.
Taiwan Semiconductor Manufacturing Company, a significant player in the technology sector, jumped 1.76 percent, reflecting the sector's strong performance. CTBC Financial, First Financial, and Hon Hai Precision were unchanged.
On the global front, the U.S. economy rebounded by more than expected in the second quarter of 2025. ADP reported that private sector employment in the U.S. increased more than expected in July. The NASDAQ rose 31.38 points or 0.15 percent, but the S&P 500 fell 7.96 points or 0.12 percent, and the lead from Wall Street is soft, with the Dow dropping 171.71 points or 0.38 percent.
Crude oil inched higher on Wednesday, with West Texas Intermediate crude for September delivery rising $0.82 or 1.18 percent at $70.02 per barrel. Two Fed Governors, Michelle Bowman and Christopher Waller, preferred to lower rates by a quarter percentage point.
Taiwan will release preliminary Q2 numbers for gross domestic product later today, providing more insights into the country's economic performance. The Taiwan stock market is looking at a steady start on Thursday.
[1] Source: Central News Agency, Taiwan [2] Source: Bureau of Economic Affairs, Ministry of Finance, Taiwan [3] Source: Taiwan Stock Exchange [4] Source: ADP Research Institute [5] Source: U.S. Trade Representative Office
Investing in tech companies like MediaTek and Taiwan Semiconductor Manufacturing Company (TSMC) could be wise during the current growth period of Taiwan's economy, as the technology sector has been a key driver of the Taiwan Stock Exchange (TSE). However, the potential slowdown in exports in the second half of 2025 could impact domestic company revenues, especially when converted from New Taiwan Dollars.
