On Friday, the stock market of Bloomberg took a decline from a January high to over 20% and is on track to enter a bear market.
The Taiex gauge dropped as much as 1.1% in Taipei. Taiwan Semiconductor Manufacturing Co., which accounts for more than a quarter of the index's weighting, declined as much as 2.1%.
In the last quarter, tech-heavy equity markets in Taiwan and Korea were among the worst performers in Asia, both down over 15% due to rate hikes by global central banks. During the three month period, foreign investors net sold more than $16 billion of Taiwan stocks, the most among emerging Asian markets outside of China.
There are several negatives including global inflation concerns, growth slowdown fears, and rate hikes that lead to global funds returning to the US from emerging markets, said Li Fang-kuo, chairman of President Capital Management. The downward trend in Taiwan stocks will continue, so investors should avoid catching the falling knife. A cautious outlook for the semiconductor sector and the fear of a global recession have led to investor sentiment about tech stocks in the world. The Taiwan Stock Exchange said on Thursday that it will adopt stabilizing measures if necessary when there are irrational declines in the stock market.
Taiwan's deputy finance minister said the National Financial Stabilization Fund will continue to monitor the stock market to see if it needs to step in.
If the tariffs on Chinese goods are canceled by the Biden administration by July 6, it will boost markets, according to a note by SinoPac Securities Investment Service Corp.
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