Mon Apr 07 01:00:00 UTC 2025: ## Taiwan Stock Market Braces for Sharp Drop on “Black Monday”

**Taipei, Taiwan** – Taiwan’s stock market is expected to plummet significantly on Monday, April 7th, following a long weekend and the escalating US-China trade war. Analysts predict a substantial correction, with some forecasting a drop of as much as 2,000 points, pushing the Taiex below the 20,000 mark and potentially as low as 18,000.

The anticipated decline is fueled by several factors, including:

* **US-China Trade War:** President Trump’s retaliatory tariffs have triggered a global sell-off, creating a systemic risk that is expected to prolong the downturn.
* **Program Trading:** Algorithmic trading is expected to exacerbate the fall, with stop-loss orders and short-selling likely to amplify the decline.
* **ETF Redemptions:** A wave of ETF redemptions is anticipated, further increasing selling pressure on underlying stocks.
* **TSMC’s ADR Decline:** The significant drop in Taiwan Semiconductor Manufacturing Company (TSMC) ADRs reflects global investor sentiment and contributes to the expected market downturn.

Financial institutions are predicting a particularly severe initial two days of trading, with some estimating a decline of up to 15%. This is based on the 9.2% drop in the FTSE Taiwan Index last week. While the weight of TSMC in the Taiex is significantly higher than in the FTSE index, the 13.8% decline in TSMC ADRs since April 2nd is seen as consistent with the anticipated drop.

Despite the grim forecast, Unified Investment Consulting chairman, Li Fang-guo, anticipates a market bottom around mid-April. He suggests investors avoid attempting to “catch the bottom” this week, advising against hasty buying or selling decisions. Li highlights ten positive factors expected to stabilize the market from April 14th onwards, including strong Q1 earnings reports from US companies, a positive outlook from TSMC’s upcoming Q1 earnings call on April 17th, a likely Fed rate cut in June, and the upcoming Computex event in Taiwan featuring Nvidia CEO Jensen Huang. These positive developments are expected to support a market rebound in the second quarter.

However, Li cautions that the current situation is distinct from previous market dips, emphasizing the systemic risk posed by the trade war, and thus a longer downturn is anticipated. The Taiwan Stock Exchange held a press conference before the opening bell to address investor concerns.

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