World equity markets spiraled lower yesterday as Asia and Europe took their cue from a pre-weekend Wall Street slump sparked by renewed US economic fears, credit concerns and record high oil prices.
Investors were rattled by a steep US decline on Friday, when worries about the outlook for the world's largest economy grew amid poor earnings news on the 20th anniversary of the New York market crash.
Taiwan share prices closed sharply lower yesterday, with the benchmark TAIEX closed down 251.09 points, or 2.61 percent, at 9,360.63, on turnover of NT$149.30 billion (US$4.58 billion). Shares plunged as much as 3.5 percent during the day.
Elsewhere in Asia, Hong Kong shares suffered their biggest fall in one day in more than seven years, while Tokyo, Seoul and other major bourses also dropped sharply.
The European single currency also hit a record high US$1.4347. A strong euro makes eurozone exports more expensive for buyers using weaker currencies, and therefore weighs on European shares.
Frankfurt, London and Paris stock markets slid by more than 1 percent on Monday.
"After having triggered a downturn across the region today, Wall Street holds the key if the markets can quickly stabilize," Jih Sun Securities Investment (日盛投顧) deputy manager Wilson Lien (連偉勝) said.
The Taiwan market, in particular, will depend on how technology shares on NASDAQ and those included in the Philadelphia Semiconductor Index perform in the immediate term, he said.
The plunge on Wall Street has sent shockwaves at a time when local technology stocks have started showing signs of picking up momentum and possibly leading the market toward the year's high of 9,807 points attained in late July, Lien said.
Across Asia, Tokyo led the way lower, dropping more than 3 percent in early deals as a stronger yen weighed heavily on exporters. Asia's largest market managed to recover some of its losses in late trade to end down 2.24 percent.
Elsewhere, Seoul lost 3.36 percent, Manila gave up 3.98 percent and Jakarta slumped 3.8 percent.
Singapore ended 2.81 percent lower, Shanghai slipped 2.59 percent and Sydney finished trade with a loss of 1.9 percent.
The US dollar also suffered fresh losses after G7 finance chiefs refrained from voicing increased concern about currencies, which markets took as a green light to drive the greenback to a new record low against the euro.
The yen shot higher, hitting Japanese exporter shares, as the latest stock market rout prompted investors to unwind risky bets funded by selling the Japanese unit.
In Taipei, the NT dollar closed at NT$32.570 over the US dollar.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to