Sat, Jan 05, 2019 - Page 12 News List

TAIEX drops below 9,400 points on tech stock selloff

By Kao Shih-ching  /  Staff reporter

The TAIEX yesterday fell 1.16 percent on a technology-led selloff driven by Apple Inc cutting its first-quarter revenue forecast, closing below 9,400 points for the first time since the market correction that started in October last year.

The benchmark ended 109.91 points lower at 9,382.51, with turnover of NT$105.984 billion (US$3.43 billion), Taiwan Stock Exchange (TWSE) data showed.

The broader market’s decline was led by a 7.5 percent fall in electronics stocks and a 4.36 percent fall in semiconductor stocks, as well as a 8.65 percent plunge in finance.

“With the TAIEX falling below the 9,400-point mark, the market has turned weaker technically and more losses could follow,” Concord Securities (康和證券) analyst Kerry Huang said.

The 9,400 mark, an intraday low set on Monday last week, was an important technical support.

“With the earnings season in the US and Taiwanese markets soon to start, investors should be on the alert for possible negative leads that could send ripples through share prices in the short term,” Huang said.

The retreat in local equities followed Apple CEO Tim Cook’s downbeat revenue forecast for the first quarter, prompting foreign institutional investors to sell shares of Apple suppliers in Taiwan, Hua Nan Securities Investment Management Co (華南投顧) chairman David Chu (儲祥生) said.

In a letter to investors on Wednesday, Cook lowered the company’s revenue guidance for the quarter to US$84 billion from a previous estimate of US$93 billion, citing signs of weakness in China.

Shares in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, slumped 3.48 percent to NT$208.

TSMC’s losses have wiped out NT$1.5 trillion in market value since September last year, when they were traded at NT$260, company data showed.

Hon Hai Precision Industry Co (鴻海精密), a major assembler of iPhones, saw its shares fall 1.89 percent to NT$67.6, while smartphone camera lens maker Largan Precision Co (大立光) dropped 4.13 percent to NT$2,905.

Outperforming the broader market, flat panel maker Innolux Corp (群創) gained 0.62 percent to close at NT$9.50, while rival AU Optronics Corp (友達光電) ended unchanged at NT$11.90.

Foreign institutional investors sold a net NT$9.29 billion in local shares yesterday, while securities investment companies sold a net NT$833 million, TWSE data showed.

Despite the likelihood of weakness in the smartphone industry this year, investors should keep a close watch on trade talks between the US and China in Beijing next week, which could affect global equities markets, Chu said.

“It is not a good time for the National Stabilization Fund to buoy local equities,” Chu said.

With foreign investors selling off local shares, the government fund might not have enough ammunition to support the market and the government needs to find the right timing, he said.

Additional reporting by CNA

This story has been viewed 1511 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top