The TAIEX yesterday moved sharply lower across the board, falling almost 3 percent to end below 10,300 points, with market sentiment spooked by heavy losses on US markets in the wake of plunging crude oil prices.
Unconfirmed reports that North Korean leader Kim Jong-un is in a critical condition after heart surgery triggered more selling, as investors grew concerned over potential geopolitical instability, traders said.
The TAIEX closed down 298.29 points, or 2.82 percent, at 10,288.42, on turnover of NT$183.281 billion (US$6.09 billion). Foreign institutional investors sold a net NT$24.25 billion of shares on the main board, Taiwan Stock Exchange data showed.
Photo: CNA
“The tumbling oil prices signaled weak global demand, despite a recent cut in production by OPEC and non-OPEC countries,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said. “Along with the news on Kim’s health, investors simply rushed to cut their holdings in large-cap stocks to avoid more losses down the road.”
Huang said contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was hit hard by the global market turmoil, plunging 2.96 percent to close at NT$295. Led by TSMC, the bellwether electronics sector ended down 2.83 percent.
Hon Hai Precision Industry Co (鴻海精密), a key supplier of Apple Inc’s iPhone, shed 3.54 percent to end at NT$73.50, while Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple, also fell 4.76 percent to close at NT$3,700.
“Petrochemical stocks came under heavy pressure in the wake of the fragile energy market. With the virus spread continuing, few can be sure how badly the disease will hurt the economy,” Huang said.
Among petrochemical stocks, Nan Ya Plastics Corp (南亞塑膠) shed 4.19 percent to close at NT$57.20 and Formosa Petrochemical Corp (台塑石化) lost 2.69 percent to end at NT$79.50.
Given the volatility in global financial markets, investors sold financial shares, amid concern that local banks and insurance companies would incur losses from their overseas investments, Huang said.
That led to Cathay Financial Holding Co (國泰金控) falling 2.63 percent to NT$37 and Fubon Financial Holding Co (富邦金控) shedding 2.74 percent to NT$39.
“The TAIEX fell below the 10-day moving average of 10,314 today,” Huang said, adding that he sees the next support level at about 10,000 points.
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