Since the beginning of this year, the U.S. stock market has been rising steadily due to the promotion of AI and other technology stocks. The S&P 500 index has hit record highs many times, and investors have profited from the bull market. On the other hand, Taiwan's stock market, although TSMC is also in charge, has been hit by foreign investment this year. The sell-off resulted in net overselling of US$15.98 billion, making it the market with the largest number of foreign withdrawals among Asian stock markets.
Will stocks continue to fall after the US Federal Reserve cuts interest rates?
It is worth noting that as the U.S. Federal Reserve is about to start cutting interest rates this week, the dark clouds hanging over the Taiwan stock market do not seem to have lifted.
In the battle royale of the global capital market in early August, the Taiwan stock market suffered a disaster that collapsed by thousands of points. Now the Fed is about to cut interest rates. The extent of the rate cut reflects the Fed's expectations for the prospects of the U.S. economy, and whether the Japanese yen arbitrage trade will once again trigger unwinding of positions. Disasters, as well as the stability of the geopolitical situation in the Middle East and other factors, will affect the next trend of Taiwan stocks.
Therefore, after the Fed announces an interest rate cut, whether funds from Taiwan stocks will continue to flow out deserves our continued attention.
Taiwan stocks close higher before Mid-Autumn Festival
However, what is gratifying for investors is that Taiwan stocks shrank on the trading day before the Mid-Autumn Festival. The weighted index closed at 21,850.08 points, standing above the monthly line of about 21,839 points, up 90.43 points. The transaction value was NT$236.053 billion, which was a decent performance. Stablize.
In this regard, Chen Yiguang, chairman of First Financial Investment Consulting, also said in an interview that the Federal Reserve's interest rate cut is relatively beneficial to Taiwan stocks. The market also expects TSMC's revenue in the third quarter to exceed that in the second quarter, a single quarter. Earnings per share are about 10 yuan, which is favorable for stock price performance and further drives the trend of Taiwanese stocks.
In addition, Zhu Chengzhi, chairman of Wanbao Investment Consulting, also pointed out that the market is more likely to make a positive interpretation of the Fed's interest rate cut. After all, Taiwan stocks have passed the stage of foreign capital selling, and foreign capital has oversold from July to September 11. With more than NT$730 billion, whether the Federal Reserve cuts interest rates by 1 or 2 points, it will cause the US dollar to depreciate and the New Taiwan dollar to appreciate, thereby attracting foreign investment to buy Taiwan stocks.
