Market capitalization of the Taiwan Stock Exchange (TWSE) tumbled more than 4.5 percent last week after share prices came under greater pressure amid volatility on Wall Street, as well as lingering concerns over US-China trade frictions.
Worries over a speedy interest rate hike cycle by the US Federal Reserve to push up the US dollar, which would lead to further fund outflows from the region, were also cited as a cause for the decline, dealers said.
The market cap of the Taiwan Stock Exchange shrank by NT$1.37 trillion (US$44.18 billion) to NT$28.6 trillion, a 4.56 percent drop from a week earlier after the TAIEX on Friday shed 430.08 points to end at 9,489.18, a drop of or 4.34 percent from the previous week’s close.
Friday’s closing was the lowest since Feb. 3 last year.
The FTSE TWSE Taiwan 50 Index, which consists of the 50 largest companies in the nation, fell 372.54 points (4.87 percent) for the week, while the Formosa Stock Index, made up of stocks listed on the main board and the over-the-counter market, lost 506.58 points (4.50 percent).
Foreign institutional investors continued to dump their holdings on the main board, which sent the TAIEX into a tailspin, while the government-led funds were said to have intervened by snapping up bargains to prevent local share prices from falling further.
With sentiment toward the market outlook weakening, foreign institutional investors sold a net NT$31.21 billion worth of shares last week.
They have sold NT$153.17 billion so far this month, with the TAIEX tumbling 1,517.16 points (13.78 percent) over that period.
Total turnover on the main board last week was NT$516.49 billion, with the electronics component sector accounting for 22.25 percent, the semiconductor sector 20.97 percent and the optoelectronics sector (11.75 percent).
Analysts said the local equity market is expected to continue to see more losses as the TAIEX fell below the nearest technical support at about 9,500 points, which has made the main board more fragile.
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