The nation's benchmark index suffered its biggest decline in more than three years as fresh Wall Street concerns over the US home loan market sent the region tumbling, dealers said.
The TAIEX slumped 395.37, or 4.26 percent, to close at 8,891.88 yesterday, the biggest drop since May 17, 2004. About six stocks fell for every one that gained. Futures due in August tumbled 5.2 percent to 8,695.
Overseas investors dumped a net of NT$49 billion (US$1.5 billion) in shares yesterday alone, the third-biggest selloff in the history of the local equity market.
Yuanta Core Pacific Capital Management Co (
The performance of regional markets meant that hopes for a technical rebound on the local bourse were premature, he said.
However, Tam noted that the local index may be defended at the quarterly moving average of around 8,700 points because of ample liquidity.
Hon Hai Precision Industry Co (
"Apple has generated strong enthusiasm for its iPhone and shares of its suppliers have benefited from that excitement," said Phil Chen (
Hon Hai, which provides assembly services for Apple, lost NT$16, or 5.9 percent, to NT$256. Foxconn Technology Co (富士康科技), a maker of metal casings for mobile phones, plunged NT$25, or 6.8 percent, to NT$343. Shares of Hon Hai have risen 65 percent in the past 12 months, while Foxconn's have climbed 74 percent.
Some investors are speculating that Apple is reducing production of either its popular iPod music players or the iPhone, perhaps by as much as 50 percent, said Gene Munster, an analyst at Piper Jaffray Cos in Minneapolis. The iPhone, which combines a music player with a cellphone and Web browser, went on sale on June 29.
Shares of Cupertino, California-based Apple dropped the most in more than two years in US trading, falling 6.8 percent to US$131.76.
Apple spokeswoman Natalie Kerris said the firm does not comment on rumors and speculation.
Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電) led declines among exporters on renewed concern that falling home prices and a rout in the US subprime loan industry would curb growth in the world's largest economy.
TSMC, the world's biggest supplier of made-to-order chips, slumped NT$3.70, or 5.9 percent, to NT$61.30. The company makes about three-quarters of its sales from US buyers. MediaTek Inc (聯發科), the world's largest supplier of chips for DVD players, dropped NT$24, or 4.1 percent, to NT$569.