Taiwan Takes the Lead in Asia-Pacific Markets as Chip Stocks Surge
In a positive turn of events for the Asia-Pacific markets, Taiwan emerged as the frontrunner on Friday, with chip stocks experiencing significant gains. The heavyweight in this sector, Taiwan Semiconductor Manufacturing Corp (TSMC), saw a surge of as much as 6.63%. This boost propelled the Taiwan Weighted Index to jump 2.63%, closing the day at 17,681.52.
The rise in chip stocks is a promising sign for the global technology industry, as these components are essential for various electronic devices and play a crucial role in powering the digital economy. TSMC’s impressive performance indicates a growing demand for semiconductors, which bodes well for the overall market sentiment.
Meanwhile, investors turned their attention to Japan’s December inflation data, which holds significance as it is the last key data before the Bank of Japan’s first monetary policy meeting of 2024. The world’s third-largest economy witnessed a decline in its headline inflation rate, reaching its lowest level since June 2022. In November, the rate stood at 2.8%, but it cooled down to 2.6% in December.
Similarly, Japan’s core inflation rate, which excludes prices of fresh food, also experienced a decline from November’s 2.5% to 2.3%. These figures align with the expectations of economists polled by Reuters. The Bank of Japan is set to commence its two-day monetary policy meeting on January 22, with the decision announcement scheduled for the following day.
The positive momentum extended to other Asian markets as well. Japan’s Nikkei 225 rebounded after two consecutive days of losses, climbing 1.4% to close at 35,963.27. The Topix index also experienced a rise of 0.72% to reach 2,510.03. South Korea’s Kospi witnessed a gain of 1.34%, closing at 2,472.74, while the small-cap Kosdaq saw a more modest increase of 0.28%, finishing at 842.67.
In Australia, the S&P/ASX 200 index rose by 1.02% to close at 7,421.2, following three consecutive days of losses. However, Hong Kong’s Hang Seng index slipped by 0.72%, reversing earlier gains. Similarly, the mainland Chinese CSI 300 fell by 0.15% to end the day at 3,269.78, after experiencing a rally on Thursday.
The positive sentiment in the Asian markets was influenced by the rebound in the United States. Overnight, all three major indexes in the US experienced gains, primarily driven by the performance of tech companies. Apple, in particular, saw a notable increase of 3.3% after Bank of America upgraded the stock to a buy rating. The bank predicts more than a 20% upside for Apple over the next 12 months, making it the tech giant’s best day since May 5, 2023.
The Dow Jones Industrial Average added 0.54%, while the S&P 500 climbed 0.88%, coming within just 15.62 points of its closing record of 4,796.56. The tech-heavy Nasdaq Composite posted the largest gain, jumping 1.35%.
Overall, the surge in chip stocks in Taiwan and the positive performance of tech companies in the US have injected optimism into the Asia-Pacific markets. These developments indicate a growing demand for technology-related products and services, which could potentially drive economic growth in the region. As investors eagerly await the Bank of Japan’s decision, market participants will closely monitor any further developments that may impact the trajectory of these markets.
– CNBC’s Sarah Min and Hakyung Kim contributed to this report.
