Taiwan Stocks Plunge Over 1,000 Points as US-Iran Tensions Escalate

Taiwan's stock market experienced a significant downturn, plummeting over a thousand points, as escalating tensions between the United States and Iran triggered a surge in risk aversion among investors. The New Taiwan Dollar also weakened against the US Dollar, trading around 32.2.

The market sell-off was prompted by US President Trump's announcement to reimpose sanctions on Iran and impose a 20% toll on goods transiting the Strait of Hormuz. Further exacerbating concerns, Trump signaled potential new military strikes against Iran, intensifying the volatile situation in the Middle East.

This geopolitical uncertainty led to a sharp rise in international oil prices and a flight to safety, boosting the US Dollar index. Expectations of the Federal Reserve maintaining high interest rates, or even implementing further hikes, also grew, impacting global markets. The tech-heavy Philadelphia Semiconductor Index fell nearly 5%, dragging down Asian markets, including Taiwan.

While major Asian currencies showed relative stability, the New Taiwan Dollar faced depreciation pressure. The central bank intervened to moderate the currency's fall, but analysts predict a continued weakening trend in the short term, influenced by potential capital outflows from foreign investors. The market's focus remains fixed on the evolving Middle East situation, upcoming US inflation data, and the crucial earnings call of Taiwan Semiconductor Manufacturing Company (TSMC) on July 16, which is expected to provide insights into AI demand, capital expenditure, and future operational outlook.