TSMC’s Bleak Outlook and China’s Stimulus Counterbalance

The ASX remained relatively static today, demonstrating a slight downward trend as investors attempted to balance the effects of China’s additional stimulus measures against a downturn in technology stocks. This technology sector weakness followed chipmaking giant TSMC’s grim outlook for the year.

Key points:

• Taiwan Semiconductors announced a postponement of production at its Arizona project until 2025. This delay highlights the difficulties of international expansion amidst an extended slump in the electronics market.

• In an effort to stimulate economic activity, China’s primary economic regulator, the National Development and Reform Commission, introduced new initiatives to encourage spending in the automobile and consumer electronics sectors.

• These measures gave major mining companies a slight boost. However, their growth was contained.

• The absence of economic data at the week’s end, combined with an impending flood of economic and earnings data next week, gave investors minimal incentive to participate.

• The banks saw a small rollback of this week’s gains as investors began to take profits.