Taiwanese shares closed lower yesterday on the back of heavy losses on Wall Street overnight as investors at home and abroad feared that US President Donald Trump could face impeachment amid reports of meddling in a probe into his former national security adviser, dealers said.
However, the weighted index recovered most of its earlier losses after it dropped below the 9,900-point level, which prompted bargain hunters to pick up select market heavyweights until the end of the session, they said.
The TAIEX closed down 44.22 points, or 0.44 percent, at the day’s high of 9,969.45, off an early low of 9.895.65, on turnover of NT$83.29 billion (US$2.76 billion), Taiwan Stock Exchange data showed.
The market fell 0.61 percent to below 10,000 points on opening and continued selling pushed the index further below 9,900 points in the wake of a 372-point dive on Wall Street overnight.
“It is unlikely that Trump will be impeached, since both chambers of the US Congress are controlled by the ruling Republican Party, so most of the equity markets, including Taiwan, recouped part of their earlier heavy losses as investors turned calmer,” Concord Securities Co (康和證券) analyst Kerry Huang said, referring to Hong Kong, South Korea and China.
“But Trump will no doubt be entangled in political unease in the near future, so global financial markets are still worried that a push for tax reform and infrastructure work by Trump will be delayed,” Huang said.
He said that yesterday’s turnover appeared moderate.
“That’s why large-cap stocks, particularly in the bellwether electronics sector, recouped some or even all of their earlier losses, stopping the weighted index from falling further,” he said.
Among the stocks whose downturn was reversed or capped, Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, gained 0.73 percent to close at NT$4,855 after hitting a low of NT$4,755.
Taiwan Semiconductor Manufacturing Co (台積電) fell 0.25 percent to end at NT$203.50, off an early low of NT$201.50, while Hon Hai Precision Industry Co (鴻海), an assembler of iPhones and iPads, which has been sued by US chip designer Qualcomm Inc for not paying licensing fees, saw its stock come off an earlier low of NT$100.50 to close at NT$102, down 0.97 percent.
In the petrochemical sector, which appeared relatively resilient and ended down 0.26 percent due to a rebound in crude oil prices, Nan Ya Plastics Corp (南亞塑膠) edged up 0.42 percent to close at NT$71.40.
“Amid political uncertainty in the US, volatility on Wall Street could continue to affect other markets,” Huang said.
“I am also worried about the [New] Taiwan dollar. If the currency continues its weakness against the greenback, fund outflows from here are expected, which will be a bad sign for equities,” he added.
The NT dollar fell NT$0.085 to close at NT$30.225 against the US dollar on turnover of US$935 million.
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