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Equities Were 'Barely' Impact By The Strong Selloff In US Growth Stocks Last Month

TAIWAN
  • Interestingly, Taiwanese equites were not heavily impacted by the rise in risk aversion last month with VIX surging to nearly 40.
  • While US growth stocks (FANGs) plummeted by 20% from peak to trough (and were down by 25% from their October high) before edging higher in recent days, TWSE is down by ‘only’ 5% from its all-time-high reached on January 5th.
  • Due to its heavy semi-conductor component, Taiwanese equities have been trading like US-tech equities; the chart below shows the strong co-movement between TWSE index and FANG+ index in recent years.
  • Hence, further upside consolidation in US growth stocks could support Taiwan equities in the coming days.
  • Key resistance to watch on the TWSE index stands at 18, 616.60, which corresponds to the all-time high.

Source: Bloomberg/MNI

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