Market views· Sector Analyst
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The Taiwan market continues to exhibit a clear rotation into defensive sectors. The financial sector (0055) is leading the market with strong relative strength against the benchmark. Conversely, cyclical sectors such as technology (0052), semiconductors (00891), and 5G/telecommunications (00881) are maintaining a generally weak trend. Risk-off sentiment is spreading across the market, highlighting a distinct preference for defensive assets.
Action: Given the clear capital shift toward defensive sectors, maintaining a defensive portfolio allocation and focusing on the financial sector, which shows pronounced relative strength, is an effective strategy. Reducing exposure to cyclical sectors is necessary.
| # | 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 |
Serving a defensive role amidst market risk-off sentiment, supported by strong relative strength and momentum.
Exhibiting defensive characteristics with a recovery in short-term relative strength and positive momentum.
Vulnerable to market risk-off sentiment, showing persistent weakness in relative strength and negative momentum.
Facing pressure as a cyclical sector, with weakness in both short- and long-term relative strength and negative momentum.
Recording the largest decline in relative strength and negative momentum, making it the most vulnerable to market risk-off sentiment.
The Financials sector (0055) is demonstrating overwhelming outperformance relative to the benchmark, with 20-day relative strength of +15.14% and 120-day relative strength of +28.04%. Momentum is also very strong at +24.39, with capital inflows concentrating in this sector amid market risk-off sentiment, leveraging its defensive characteristics.
The Green Energy sector (00896) shows slight strength with 20-day relative strength of +0.14%, although 60-day and 120-day relative strengths remain negative. Momentum is positive at +5.33, indicating a short-term recovery trend alongside its defensive characteristics.
The Technology sector (0052) declined slightly with 20-day relative strength of -0.55%, while 60-day and 120-day relative strengths have consistently remained negative. Momentum is weak at -1.13, reflecting continued underperformance as a cyclical sector amid market risk-off sentiment.
The Semiconductor sector (00891) has corrected with a 20-day relative strength of -1.97%, and its 120-day relative strength has also declined to -5.38%. Momentum is weak at -4.47, and as a cyclical sector, it is under pressure amid the broader market's risk-off sentiment.
The 5G/Telecom sector (00881) has declined with a 20-day relative strength of -3.31%, while its 120-day relative strength has plunged to -13.77%. Momentum is also weak at -3.43, marking the worst performance among cyclical sectors and indicating the greatest impact from the market's risk-off sentiment.
The Taiwan market is undergoing a clear rotation into defensive sectors.
Average relative strength of cyclical sectors at -1.94% versus defensive sectors at +7.64%, resulting in a spread of -9.58%, indicating a clear risk-off bias. Strong relative outperformance in the Financials sector (0055) and broad weakness in Technology, Semiconductors, and 5G/Telecom sectors support this trend.
Key driver: Market-wide risk-off sentiment
Sector ETF prices relative to 0050 from AlphaLenz's daily price database, 1 Nov 2026.