(April 14): Taiwanese stocks rose to a new record as investors returned to the pre-Iran war trading theme of chasing AI shares amid hopes for easing tensions in the Middle East.
The Taiex Index closed up 2.4% Tuesday, boosted by index heavyweight Taiwan Semiconductor Manufacturing Co, which also rose to a new high. The benchmark has gained about 25% this year, outpacing the MSCI Asia Pacific Index’s nearly 10% increase.
The latest advance helped the island’s stock gauge erase all its losses since the war started at the end of February, when global AI stocks were battered due to concerns about soaring energy costs and supply disruptions. Also brightening investor mood was a broader rebound in Asian stocks and Beijing’s policy incentives for Taiwan following a landmark meeting between Chinese President Xi Jinping and the island’s opposition leader Cheng Li-wun.
“As the Iran deal hopes improve, markets will refocus on earnings growth and AI,” said Ritesh Ganeriwal, head of investment at Syfe Pte in Singapore. “Taiwan will continue to benefit given its dominant position in the AI supply chain.”
TSMC’s gains came after the sole chipmaker for Nvidia Corp’s advanced AI accelerators reported a 35% increase in quarterly revenue last week, suggesting global AI chip demand remained intact during the first weeks of the Iran war. It is scheduled to report full first-quarter earnings on April 16.
See also: Yara ups deliveries in 1Q as Iran war jolts fertiliser market
“With the rapid growth trajectories we are seeing from Anthropic, OpenAI and other leading AI developers, many of those doubts have faded,” said Vikas Pershad, an Asian equities portfolio manager at M&G Investments. “Key bottlenecks have tightened meaningfully, and many of the most critical points in the value chain continue to sit in Taiwan.”
The Iran war did not impact analyst sentiment toward Taiwan and South Korea as their tech stocks continued to see strong assessment upgrades, thanks to a strong earnings cycle and a return to momentum chasing, according to Sanford C Bernstein.
Uploaded by Arion Yeow
