The TAIEX yesterday plunged 1.88 percent to close below 16,000 points following an overnight dive on the tech-heavy NASDAQ and the Philadelphia Semiconductor Index in the US.
The benchmark index fell 305.32 points to close at 15,906.41, below the monthly moving average of 15,951.
Turnover totaled NT$327.678 billion (US$11.59 billion) during the trading session.
Photo: CNA
Foreign institutional investors sold a net NT$52.52 billion of shares on the main board, Taiwan Stock Exchange data showed.
Contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) led the main board, moving lower throughout the session after their American depositary receipts dropped 2.47 and 3.72 percent respectively in the US overnight.
TSMC, the most heavily weighted stock on the local market, fell 3.38 percent to close at NT$601.00, while UMC dropped 5.49 percent to close at NT$49.05.
Also in the electronics sector, Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, lost 1.89 percent to close at NT$3,375.00.
Bucking the downtrend, almost all stocks in the pulp and paper industry closed higher, with YFY Inc (永豐餘控股) climbing 3.04 percent to NT$28.85.
Although a rise in 10-year US Treasury yields has prompted US investors to lock in profits on some high-flying tech stocks due to concerns over heightened valuations, bringing the TAIEX lower, the performance of Taiwan’s stock market was still strong compared with other markets, Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
The TAIEX is likely to hover between the quarterly moving average of 15,170 and the monthly moving average of 15,951, Huang said.
Securities Investment Trust and Consulting Association chairman Jeff Chang (張錫) said that now is a good time to buy stocks following the pullbacks.
TSMC has dropped close to the NT$600 mark, a level that provides an entry point for investors, Chang said, adding that it is reasonable to expect that the shares would jump to NT$700 to NT$750.
Given the robust fundamentals of Taiwan’s stock market and abundant liquidity, the TAIEX is expected to surge to 17,000 to 18,000 points, he said.
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