Market views· Sector Analyst
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The Taiwan market is exhibiting a clear rotation into defensive sectors. The financial sector (0055) has surged relative to the benchmark, demonstrating strong relative strength, while cyclical sectors such as technology (0052) and 5G/telecommunications (00881) continue to underperform. Risk-off sentiment is spreading across the market, with a distinct preference for defensive assets.
Action: In the current market environment, it is advisable to overweight defensive sectors to ensure portfolio stability and underweight cyclical sectors to reduce risk exposure.
| # | Type | |||||
|---|---|---|---|---|---|---|
| 1 | Financials 0055 | DEF | +15.14% | +18.82% | +28.04% | +24.39 |
| 2 | Green Energy 00896 | DEF | +0.14% | −4.40% | −9.71% | +5.33 |
| 3 | Technology 0052 | CYC | −0.55% | −0.73% | −0.89% | −1.13 |
| 4 | Semiconductor 00891 | CYC | −1.97% | +0.79% | −5.38% | −4.47 |
| 5 | 5G/Telecom 00881 | CYC | −3.31% | −4.35% | −13.77% | −3.43 |
Maintains strong relative strength and momentum across all timeframes, benefiting from the preference for defensive assets.
Positive short-term relative strength and momentum; its defensive nature can provide stability amid market volatility.
Displays the weakest relative strength and negative momentum across all timeframes, with continued underperformance expected.
Despite a short-term rebound, long-term relative strength and momentum remain weak, highlighting the vulnerability of cyclical sectors.
Relative strength and momentum are negative across all timeframes, and valuation burdens are expected to persist in a high-interest-rate environment.
The Financials sector (0055) recorded a 20-day relative strength of +15.14%, surging against the benchmark. The 120-day relative strength also stands at +28.04%, maintaining strong long-term strength with sustained capital inflows amid market risk-off sentiment.
The Green Energy sector (00896) posted a 20-day relative strength of +0.14%, showing a slight uptick and positive short-term trend. Momentum is healthy at +5.33, though 60-day and 120-day relative strengths remain negative.
The Technology sector (0052) recorded a 20-day relative strength of -0.55%, declining slightly against the benchmark. Relative strength is negative across all timeframes, and momentum remains weak at -1.13.
The Semiconductor sector (00891) is undergoing a correction, with a 20-day relative strength of -1.97%. Although 60-day relative strength has turned slightly positive, overall weakness is evident, indicated by a 120-day relative strength of -5.38% and momentum of -4.47.
The 5G/Telecom sector (00881) is correcting against the benchmark, recording a 20-day relative strength of -3.31%. Notably, its 120-day relative strength has plunged to -13.77%, ranking it among the most vulnerable sectors.
A clear rotation from cyclical sectors to defensive sectors is underway.
Cyclical sectors show an average relative strength of -1.94%, while defensive sectors average +7.64%, resulting in a significant spread of 9.58%. This clearly indicates a risk-off bias in the market.
Key driver: Risk-off sentiment driven by persistent high interest rates and concerns over economic slowdown is the primary driver.
Sector ETF prices relative to 0050 from AlphaLenz's daily price database, 31 Oct 2026.