Local shares yesterday came under heavy downward pressure, falling more than 1 percent as renewed fears over a possible increase in domestic COVID-19 infections hit market sentiment after the nation last week reported a case related to a Belgian national.
Selling focused on the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which pushed down the broader market as investors ignored gains posted by tech heavyweights on the US market at the end of last week, dealers said.
The TAIEX closed down 151.77 points, or 1.2 percent, at 12,513.03, on turnover of NT$231.43 billion (US$7.84 billion). Foreign institutional investors sold a net NT$30.4 billion worth of shares on the main board, Taiwan Stock Exchange data showed.
Photo: Chu Pei-hsiung, Taipei Times
On Saturday, the Central Epidemic Command Center (CECC) reported seven new COVID-19 infections, including one Belgian engineer who might have been infected in Taiwan, although the CECC has not yet confirmed it as a domestic case.
The weakness on the main board continued as downward pressure increased, starting in the late morning session, pushing the TAIEX below the nearest technical support at about the 10-day moving average of 12,520 points by the end of the session, dealers said.
Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said the Belgian national case reminded many investors of earlier cases involving a Thai migrant worker and a Japanese student who tested positive for COVID-19 soon after returning from Taiwan.
“The infection sources of the three cases remain unknown, which raises fears over the domestic situation, although the nation has not officially reported any domestic cases” since April 12, Huang said.
“Local investors simply seized on the negative leads to cut their holdings by ignoring gains on the NASDAQ, and the electronics sector fell victim to such mentality,” Huang said.
“The TAIEX fell below the 10-day moving average today to make the main board technically weaker, and further selling could test the next technical support at about the 20-day moving average of 12,434,” he added.
TSMC shed 2.23 percent to close at NT$416 as investors rushed to lock in gains built in recent sessions. Led by TSMC, the electronics sector and the sub-index on the semiconductor industry were down 1.43 percent and 1.75 percent respectively.
“When investors sold TSMC, they shifted their buying to its smaller rival United Microelectronics Corp (UMC, 聯電) today, giving some support to the broader market,” Huang said.
UMC, also a large-cap stock, soared 6.49 percent.
Selling was also seen among many non-tech stocks, with Formosa Plastics Corp (台灣塑膠) down 1.4 percent, Formosa Petrochemical Corp (台塑石化) down 1.84 percent and food conglomerate Uni-President Enterprises Corp (統一企業) down 2.1 percent.
However, concerns over the spread of the virus boosted the biotech sector, where shares in Chunghwa Chemical Synthesis & Biotech Co (中化合成生技) rose 5.2 percent and Adimmune Corp (國光生技) soared 10 percent.
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