Stock market today: S&P 500 hits fresh record close on stronger economic growth
Investing.com -- Taiwan’s stock market rebounded in July, with the TAIEX Index gaining 6% month-over-month to reach 23,542.5, bringing year-to-date performance to 2.2%.
The tech sector dominated market activity, accounting for 70% of market turnover, while financials and non-tech sectors represented 5% and 25% respectively. Total (EPA:TTEF) market capitalization increased by 4% month-over-month to NT$75.3 trillion (US$2.5 trillion) by the end of July, with the tech sector making up 72% of the total market cap.
Trading activity remained stable with average daily turnover at NT$446 billion (US$15 billion) in July. Margin loan balance rose by 4% month-over-month to NT$318 billion as investor sentiment improved, with margin trading representing 4% of turnover. Short-selling remained stable at 0.4% of turnover.
According to Bank of America’s analysis of over 4,500 active long-only funds managing US$3 trillion in Asia, funds increased their positions in Taiwan in June and maintained overweight positions in Taiwan stocks and TSMC. Taiwan stock ETFs recorded NT$6 billion lower assets under management in July, though outstanding AUM reached a new high of NT$3.2 trillion at the end of June.
Taiwan’s second-quarter GDP growth jumped by 8% year-over-year as tech exports surged, though growth could weaken sequentially due to front-loading effects and softer non-tech demand resulting from TWD strength. Export order growth rose by 25% year-over-year in June, compared to 19% in May, driven by strong demand for AI products and front-loading, while non-tech demand remained weak.
The Taiwan dollar depreciated against the US dollar by 0.9% month-over-month to 29.9 at the end of July, following a 7.6% appreciation in May-June. Bank of America has revised down its end-2025 USD/TWD forecast to 28.4 from 28.8, citing increased corporate hedging, continued USD selling backed by strong exports, and ongoing equity inflows into Taiwan’s tech sector.
The AI sector continues to drive growth for Taiwan’s tech companies. Global cloud service providers have raised their AI investment targets, with consensus for 2025/26 global cloud capital expenditure increasing by more than 50% over the past 12 months. Taiwan’s AI supply chain has seen sales ramping up since May/June, with key AI players guiding accelerated growth into the second half of 2025. TSMC has lifted its 2025 sales growth guidance to 30% in USD terms on stronger demand.
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