Full Breakdown
Taiwan's Stock Market Reaches Record High Amid U.S. Rate Cut Expectations
9/13/2025, 10:55:50 PM
Record Performance of Taiwan's Stock Market
Taiwan's stock market has achieved a remarkable milestone, closing at a record high of 25,474.64 on Friday, marking five consecutive sessions of gains. The Taiwan Capitalization Weighted Stock Index (TAIEX) rose by 258.93 points, supported by strong performances from major companies such as Taiwan Semiconductor Manufacturing Company (TSMC) and Foxconn. The market turnover decreased to NT$482 billion (approximately US$15.9 billion), down from NT$589 billion the previous day. For the week, the TAIEX advanced by 980.06 points, with the combined market capitalization of listed companies reaching NT$82 trillion, an increase of NT$3 trillion from the previous week.
Key Drivers of Market Growth
The surge in Taiwan's stock market is largely attributed to optimism surrounding potential U.S. interest rate cuts, which are expected to lower borrowing costs globally. Analysts predict a 100% chance of a quarter-point cut in the upcoming Federal Reserve meeting, with expectations for additional cuts later in the year. This sentiment has positively influenced investor behavior, drawing more capital into high-yielding emerging markets, including Taiwan.
TSMC, a key player in the semiconductor industry, saw its stock rise by 1.61% to close at NT$1,260, setting a new all-time high. The company's strong performance is bolstered by a 34% year-over-year increase in August sales and ongoing demand for chips driven by artificial intelligence applications. Other notable gainers included MediaTek and Delta Electronics, which rose by 0.34% and 0.72%, respectively.
Criticism and Market Concerns
Despite the positive momentum, some analysts express caution regarding the sustainability of the rally. President Securities Chair Li Fang-kuo warned that upcoming Taiwan futures settlements and the U.S. "quadruple witching day" could lead to increased market volatility. He noted that a sharp reversal accompanied by heavy selling would serve as a warning signal for investors. Additionally, there are concerns about speculative trading, as evidenced by a rapid rise in margin financing, which climbed from NT$231 billion at the end of July to nearly NT$270 billion.
Official Statements & Responses
Market analysts emphasize the importance of monitoring economic indicators closely. "The focus shifted away from the CPI print to the jobless claim number," said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions. "What you're getting is this tug of war between data that's pointing to slowing in the economy, but at the same time the reaction is to price-in additional Fed easing, which is giving support to the market."
Verbatim Quotes
- “President Securities Chair Li Fang-kuo (???) said the rally is supported by liquidity but cautioned that next week’s Taiwan futures settlement and the US “quadruple witching day” could increase market volatility.” — Li Fang-kuo, President Securities Chair
- “It feels like markets are focused on the softening labor market. That implies a Fed that is going to embark on a rate-cutting cycle,” — Mona Mahajan, Head of Investment Strategy at Edward Jones
What's Next
As the market anticipates the Federal Reserve's decision on interest rates, investors will be closely watching economic data releases that could influence future market movements. The upcoming weeks may reveal whether the current rally can be sustained or if corrections are on the horizon.
