The TAIEX yesterday closed lower as investors took their cue from a plunge on Wall Street overnight amid rising fears over a quicker interest-rate cycle in the US at a time of solid economic recovery, but the index recouped some of its earlier losses as bargain hunters became active in the late morning, taking advantage by buying stocks that had been hammered.
At the end of trading, the TAIEX was down 156.77 points, or 1.49 percent, at 10,371.75 on turnover of NT$150.89 billion (US$5.13 billion).
Nonetheless, it still fell below the technical resistance level of the 240-day moving average of 10,395 points.
For the week, the index fell 754.48 points, or 6.78 percent, Taiwan Stock Exchange data showed.
“Falling below 10,395 points has made the main board technically weaker, although the weighted index came off its low by the end of the session,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “It is unlikely that the local equity market will have a meaningful rebound unless Wall Street stabilizes, but there are no signs that Wall Street will soon turn stable.”
Echoing Su, Ta Ching Securities Co (大慶證券) analyst Andy Hsu (許博傑) said that he suspects the bargain-hunting came from state-owned funds, “as the government did not want to see the weighted index fall even further amid the current global turmoil.”
On Thursday, the Dow Jones Industrial Average fell more than 500 points for the third time in five days after a drop in this week’s number of jobless claiming benefits in the US pointed to a strong economic recovery.
“Now investors in the global market fear that the US Federal Reserve will speed up the pace of its interest-rate increases this year on expectations that an economic recovery would boost inflation,” Hsu said.
Selling focused on large-cap stocks across the board, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other technology heavyweights.
TSMC shares fell 2.52 percent to close at NT$232.50, while iPhone assembler Hon Hai Precision Industry Co (鴻海精密) shares lost 1.69 percent to close at NT$87.50.
Foreign institutional investors sold a net NT$18.78 billion of shares on the main board yesterday, Taiwan Stock Exchange data showed.
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