- After reaching a historic high, the Taiwan Weighted Index fluctuated and fell back, closing down 1.40% at 43,636.44 points, with an intraday amplitude exceeding 1,700 points, mainly driven by safe-haven buying due to the escalation of geopolitical conflicts between the US and Iran.
- Nvidia (NVDA:US) disclosed a capital expenditure plan of investing $150 billion annually in Taiwan, which initially boosted tech stocks in the morning. However, a sudden change in the Middle East situation led to a structural adjustment in high-beta asset positions.
- The largest weighted stock, TSMC (2330:TW), showed relative resilience against the decline, narrowing the overall downward space of the market. The initial transaction value for the day shrank to 1.5904 trillion Taiwan dollars, indicating cautiousness in funds ahead of key macroeconomic data.
Intraday Volatility and High-Frequency Capital Movements
During the Asia-Pacific trading session on Thursday, the Taiwan Weighted Index (TWSE:TAIEX) exhibited high-frequency volatility. In the morning, driven by AI themes, the index surged to a historic high of 44,954.09 points, but faced significant selling pressure after 11 a.m. local time. As the Iranian Revolutionary Guard confirmed an attack on a US Air Force base, market risk aversion quickly intensified. High-frequency algorithmic trading and long position unwinding jointly caused the index to quickly turn from red to black, hitting a low of 43,236.36 points. The day's amplitude reached 1,717.73 points, reflecting the severe impact of geopolitical events on short-term liquidity. Ultimately, the index closed holding the core support level of the five-day moving average at 43,466 points. The day's trading volume slightly declined from the previous day's 1.6307 trillion Taiwan dollars, indicating that there is still willingness to buy at lower levels, but enthusiasm for chasing highs is clearly suppressed.
Nvidia's Capital Expenditure Commitment and AI Sentiment Fluctuations
Before the market faced external geopolitical shocks, Nvidia (NVDA:US) CEO Jensen Huang's public statement was the core driving force leading the market. The company announced plans to invest approximately $150 billion annually in Taiwan to deepen AI infrastructure and research and development. This statement reaffirmed Taiwan's long-term position as a global technology manufacturing center and sparked a valuation recovery in the AI supply chain in the morning. However, as drone conflicts near the Strait of Hormuz in the Middle East and US military strike events intensified, these high-growth, high-valuation tech assets were the first to come under pressure. Analysts pointed out that although the long-term fundamentals of the AI industry have not changed due to geopolitical factors, in the short term, funds are shifting to safe-haven assets, leading long positions to take profits near the 45,000-point mark.
Defensive Characteristics of Weighted Stocks and Liquidity Distribution
During the overall pressure on the index, the defensive attributes of large-cap blue-chip stocks became key to stabilizing the market. TSMC (2330:TW) showed relative resilience during intraday valuation adjustments, with a closing decline significantly smaller than the overall market, effectively limiting the index's downward space. From the perspective of capital flows, although some small and medium-sized tech stocks experienced significant long position unwinding, the buying interest in major weighted stocks near key moving averages remained solid. This structural differentiation indicates that domestic long-term funds and institutional investors did not engage in panic selling but instead adjusted their holdings, concentrating funds on leading companies with solid fundamentals, thereby achieving support for the index at key technical levels.
Resonance of Macro Variables and Next Stage Range Prediction
In addition to the Middle East situation, the next move of global macro funds is deeply constrained by the Federal Reserve's (Fed) policy path. The market is currently closely focused on the upcoming release of the US Personal Consumption Expenditures (PCE) price index. If the core inflation data released in the evening exceeds expectations, the market's pricing of the Fed's future rate cut timing may face reassessment, thereby exerting secondary pressure on the liquidity of global risk assets. Industry institutions such as Hua Nan Investment Advisory estimate that, provided geopolitical risks do not further substantially spread, the Taiwan stock market will enter a wide fluctuation pattern in the short term, with tomorrow's core trading range expected to converge between 42,500 points and 44,000 points. The subsequent trend will depend on the price movements of international commodities and the US stock market's response to inflation data.
