The TAIEX yesterday plummeted below 18,000 points for the first time in almost a month, taking cues from losses on US markets amid concerns over possible rate hikes by the US Federal Reserve, dealers said.
Selling was seen almost across the board, with the bellwether electronics sector leading the downturn, as rising interest rates would make tech stocks look less attractive, they said.
The TAIEX closed down 318.98 points, or 1.75 percent, at 17,899.30, with turnover of NT$304.17 billion (US$10.98 billion).
Photo: Wang Meng-lun, Taipei Times
Downward pressure was present throughout the session, first with the electronics sector and then spreading to many non-tech stocks, pushing the TAIEX below 18,000 points for the first time since Dec. 24 last year.
“US President Joe Biden has voiced his support for the Fed to raise its key interest rates as American consumers are faced with growing inflationary pressure,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said.
“I think the Fed is now coming under more pressure to kick off a rate hike cycle. Many in the market are anticipating rates will start to rise in March,” he added.
Tang said that some analysts are predicting an increase of 0.5 percentage points in March, which he said could be a “disaster for tech stocks.”
Tang said it was no surprise that the electronics sector followed US tech stocks in losing ground yesterday.
“Liquid tech heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) faced selling soon after the local market opened, as investors relocated their funds to other instruments offering higher returns,” Tang said.
TSMC, the most heavily weighted stock in the local market, lost 1.54 percent to close at NT$641 after hitting a low of NT$637.
“The bright side was that TSMC... appeared resilient to some extent after the stock saw last-ditch buying to come off the day’s low,” he said.
“As its business outlook remains rosy, TSMC shares may not fall much further,” Tang added.
Among other semiconductor stocks, United Microelectronics Corp (聯電) lost 1.10 percent to end at NT$82.80, and smartphone chip designer MediaTek Inc (聯發科) dropped 1.83 percent to close at NT$1,070.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co (鴻海精密) fell 0.97 percent to close at NT$102, while Apple camera lens supplier Largan Precision Co (大立光) ended unchanged at NT$2,080.
The petrochemical sector lost 1.48 percent, with Formosa Plastics Corp (台塑) shares down 2.33 percent to NT $105.00.
Selling also affected shipping stocks, sending the transportation sector down 4.92 percent.
Among them, Evergreen Marine Corp (長榮海運) shed 6.85 percent to close at NT$115.50, and rivals Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運) lost 4.81 percent and 5.90 percent respectively to end at NT$99 and NT$151.50.
“I think many investors are becoming reluctant to hold on to their stocks as they fear negative leads will emerge during the holiday,” Tang said.
Taiwan’s stock markets are scheduled to close from Thursday to Feb. 6 for the Lunar New Year holiday.
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