TAIEX tumbles 1.62% on back of Wall Street slide - Taipei Times
Tue, Feb 06, 2018 - Page 12 News List

TAIEX tumbles 1.62% on back of Wall Street slide

BEARING THE BRUNT:Electronics stocks yesterday saw the steepest declines, with Hon Hai falling 2.52%, while petrochemical stocks led an afternoon rebound

By Crystal Hsu  /  Staff reporter and CNA

The TAIEX yesterday tumbled 1.62 percent, or 179.98 points, to 10,946.25, taking cues from the slump on Wall Street on Friday last week as unease over the possibility of faster monetary tightening heightened after data showed that US wages picked up, traders said.

The benchmark index closed below the 30-day moving average on turnover of NT$128.19 billion (US$4.374 billion), as a 2.6 percent drop in the Dow Jones Industrial Average on Friday last week drove investors to reduce holdings in local shares, especially in technology companies, according to Taiwan Stock Exchange data.

“It is better to be conservative and see how the correction settles,” Forwin Securities Investment Consulting Co (豐銀投顧) analyst Lee Kuan-chi (李冠嶔) said.

The TAIEX shed 270 points soon after opening and reclaimed some ground toward the end of the session, the data showed.

The fall came after the Dow plunged 666 points, the heaviest loss since June 2016.

Worries about inflation intensified after the latest US job report showed that average hourly wages in the US grew 2.9 percent from a year ago, the biggest gain since June 2009.

In January, the US created 200,000 jobs, beating an earlier market estimate of 180,000.

Yields on 10-year Treasuries hit four-year highs.

The data could prompt the US Federal Reserve to raise interest rates at a faster pace than previously planned, causing outflows of liquidity from bourses worldwide, Lee said.

The market opened down 1.4 percent and the fall deepened, with contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), iPhone assembler Hon Hai Precision Industry Co (鴻海) and other technology plays bearing the brunt.

It was only when bargain-hunting in petrochemical stocks emerged in the latter part of the session that the broader market came off its early lows, coinciding with rebounds in other regional markets such as Hong Kong and Seoul, traders said.

TSMC, the most heavily weighted stock on the local market, fell 2.5 percent to NT$253, with 45.56 million shares changing hands, exchange data showed.

The electronics sector closed down 2.09 percent and the semiconductor subindex lost 2.34 percent.

Hon Hai weakened 2.52 percent to NT$92.5, while Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, shed 4.52 percent to close at NT$3,800.

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