The nation’s benchmark index fell 1.66 percent to close at 8,732.59 yesterday, joining other Asian markets as they declined on reverberations from continuing aftershocks in Japan, which also dragged the New Taiwan dollar down by NT$0.12 to close at NT$29.112 against the US dollar.
The TAIEX closed 147.68 points lower, with electronics stocks down 2.08 percent and financial stocks down 1.1 percent, Taiwan Stock Exchange data showed.
DOWNWARD FIGURES
The local bourse also dropped on news of the IMF’s revised downward economic growth forecasts for the US and Japan, dealers said.
“Japan’s continuing aftershocks drove up investors’ worries about a potential supply shortage of components made in Japan, which could negatively influence local electronics companies,” Bevan Yeh (葉獻文), a fund manager at Prudential Financial Securities Investment Trust Enterprise (保德信投信), said in a note.
Shares of HTC Corp (宏達電), one of the world’s leading smartphone makers and the highest priced share on the local bourse, fell 4.17 percent to close at NT$1,150 yesterday.
The daily trading volume stood at NT$100.18 billion (US$3.44 billion), with foreign institutional investors selling a net NT$5.26 billion in stocks, ending a trend of net buying for 11 consecutive days, data showed.
REVERSAL
The NT dollar also saw a reverse of its previous appreciation trend, while the Australian dollar weakened against the yen, suggesting investors are becoming more risk averse, currency traders said.
“The net selling in local stocks from foreign institutional investors caused the NT dollar to fall further,” a Taipei-based currency trader at Union Bank of Taiwan (聯邦銀行) said by telephone yesterday.
The NT dollar’s depreciation also matched the fall of major Asian currencies against the US dollar, which were also influenced by rising uncertainties from Japan’s aftershocks, another currency trader at Bank of Taiwan (BOT, 臺灣銀行) said.
However, the NT dollar could surge in the short term to close back at a level stronger than NT$29, as the US dollar continues to weaken and potential inflationary worries persist in Asia’s emerging markets, the BOT trader said.
The NT dollar rose to its highest level in 13-and-a-half years to close at NT$28.991 on Friday, before falling slightly by NT$0.001 to close at NT$28.992 on Monday.
NO CONCERNS
As for the stock market, Eric Li (李俊毅), a fund manager at Allianz Global Investors Taiwan Ltd (德盛安聯投信), said investors do not need to worry about short-term net selling from foreign investors, as international capital would continue to flow into Asia’s emerging markets, as well as the TAIEX, in the following few months.
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