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The Impact of Artificial Intelligence on Stock Market Growth

Summary

The Taiwan Stock Exchange, known as Taiex, experienced a significant surge on Tuesday, reaching the highest level since April 2022. Chip manufacturers Taiwan Semiconductor Manufacturing Co. and MediaTek Inc. were the main contributors to this 1.2% increase. The Taiex index […]

The Impact of Artificial Intelligence on Stock Market Growth

The Taiwan Stock Exchange, known as Taiex, experienced a significant surge on Tuesday, reaching the highest level since April 2022. Chip manufacturers Taiwan Semiconductor Manufacturing Co. and MediaTek Inc. were the main contributors to this 1.2% increase. The Taiex index has recorded a 23% growth this year, compared to a 4.5% increase in the MSCI Asia-Pacific index.

Taiwan Semiconductor Manufacturing Co. (TSMC), the main factory used by Nvidia Corp., has been the top-performing stock on the island, responsible for over a third of Taiex’s growth this year. Positive signals that the semiconductor industry is stabilizing, along with the ongoing advancement of artificial intelligence, have contributed to the company’s rising stock prices. In fact, TSMC’s shares have already increased by 11% this month alone. On Tuesday, TSMC shares, along with other AI-related companies, rose ahead of Nvidia’s earnings announcement.

Foreign investors have recently supported the market by net buying Taiwanese stocks for three consecutive weeks, marking a turnaround after four consecutive months of capital outflows.

In November, Taiwanese stocks continued to grow as global technology companies benefited from the belief that the Federal Reserve is nearing the end of its monetary tightening campaign.

“The potential end of the Federal Reserve’s rate-hike cycle and a weakening dollar have a favorable impact on high-tech stocks, as it reduces the risk of interest rates,” said Marvin Chen, a strategist at Bloomberg Intelligence.

Frequently Asked Questions (FAQ)

What are the main contributors to the growth of the Taiex index?
The main contributors to the growth of the Taiex index are chip manufacturers Taiwan Semiconductor Manufacturing Co. and MediaTek Inc., which have experienced significant price increases.

What is the impact of artificial intelligence on stock market growth?
The growing artificial intelligence industry positively influences stock prices, particularly in the technology sector. The increasing demand for artificial intelligence and its widespread adoption drive the growth of the stock market.

Who are the main investors in the Taiwan Stock Exchange?
Foreign investors have recently become the main investors in the Taiwan Stock Exchange, with three consecutive weeks of net buying Taiwanese stocks. This marks a reversal after four consecutive months of capital outflows.

* Source: Bloomberg