Taiwan Equities Face Downward Pressure Amid Escalating Middle East Tensions

The Taiwan stock market ended its three-day rally on Thursday, with the index closing at 37,714.15, a decline of 0.43%. This reversal follows a period of significant growth that had previously pushed the market to fresh record highs, leaving the exchange just above the 37,710-point plateau. The downturn is largely attributed to a softening global outlook driven by surging crude oil prices and heightened tensions in the Middle East. Market sentiment was further dampened by a weak lead from Wall Street, where the Dow, NASDAQ, and S&P 500 all finished in the red, partly due to profit-taking and a lack of updated full-year guidance from IBM despite a first-quarter earnings beat. In Taiwan, performance was starkly mixed across the technology sector. While Taiwan Semiconductor Manufacturing Company (TSMC) rose 1.46% and Hon Hai Precision gained 1.81%, other semiconductor firms struggled significantly. United Microelectronics Corporation plunged 6.36%, and Novatek Microelectronics fell 6.13%. The primary catalyst for current volatility is the closure of the Strait of Hormuz. President Donald Trump's order to the U.S. Navy to engage vessels placing mines in the region has spiked energy costs, with West Texas Intermediate (WTI) crude for June rising 2.68% to $95.45 per barrel. Investors are now balancing the aftermath of recent record highs with fears of a re-escalating U.S.-Iran conflict. With U.S. bourses closing lower and oil supply concerns elevated, Asian markets are expected to open under pressure on Friday.