Taiwan Index Gains Threatened by US Tech Slump and Fed Anxiety

The Taiwan Stock Exchange closed Monday at 12,949.75, marking a 1.26% increase of 161.33 points. Despite the daily gain, analysts expect a soft opening for Tuesday's session as global headwinds intensify and the index remains just below the 12,950-point plateau. The rally was primarily driven by a surge in technology stocks, though the broader market remains fragile. Investors are currently balancing regional gains against a negative lead from Wall Street and looming macroeconomic uncertainty. Semiconductor giants led the charge, with MediaTek jumping 4.42% and Taiwan Semiconductor Manufacturing Company (TSMC) rallying 2.77%. In contrast, the financial sector showed mixed results, with Cathay Financial sliding 1.18% and Fubon Financial dropping 0.97%. The outlook is clouded by the upcoming FOMC policy announcement, where a 75-basis point rate hike is widely anticipated to combat soaring inflation. This monetary tightening, coupled with disappointing earnings from US tech titans including Apple, Microsoft, and Alphabet, is expected to pressure Asian equities. Energy markets also added to the volatility. West Texas Intermediate (WTI) crude futures for December fell 1.6% to $86.53 a barrel, driven by concerns over energy demand from China amid a fresh surge in COVID-19 cases, alongside a firm US dollar and increased domestic oil output.