Trade war truce Taiwan stocks

US-China trade war truce triggered asian stock market to rebound. China’s stock rose by about 3%. TAIEX rose 249 points (2.5%) to 10,137 points today on December 3rd and climb above 10,000 mark. Trading volume was more than NTD160bn for a 2nd day. GTEX also increased by 2.6%.

NTD once rose by NTD0.1 to NTD 30.75, the highest point in the past month. A person in HSBC Bank told that capital inflows in early trading was positive. As USD slightly weakened recently, NTD is expected to continue to grow.

90-day trade tariff ceasefire has helped the stock market to rebound. In addition, NTD has maintained a relatively strong momentum to boost funds. The market confidence remained positive. A judicial person told that catalyzed by the positive view at the end of the year, the index is expected to continue to rebound in the short term.

Overall speaking, consider the followings:

1) US-China trade war eased after the G20 meeting,

2) rotation among Taiwan’s major sectors remain healthy,

3) conglomerate stocks and window dressing continue to heat up, investors may focus on leading conglomerate stocks, small and medium-sized prices concept stocks and Kaohsiung concept stocks, etc.

Wei Luo, chief economist of Fubon Bank, said that there are four major risks in the global economy in 2019. Among them, the trade war is the most critical and it may have three scenarios affecting global economy. If the trade war continues, NTD may fall below NTD32.

Luo also mentioned that due to the following:

1) comparison base has been high after the continuous growth of the global economy from 2017 to 2018,

2) US tax reduction effect has been declining as the trade war continued, 3) major central banks’ monetary tightening policy, the slowdown in economic growth has become an inevitable trend.