Stocks in Taiwan plunged yesterday as investors turned cautious after Russian President Vladimir Putin announced a military operation in Ukraine.
The TAIEX closed down 461.18 points, or 2.55 percent, at 17,594.55 after hitting a low of 17,561 earlier in the day.
Turnover totaled NT$433.686 billion (US$15.48 billion), the highest since December last year, Taiwan Stock Exchange (TWSE) data showed.
Photo: Sam Yeh, AFP
The heavy downward pressure resulted in the TAIEX testing the 120-day moving average of 17,567 points.
Almost all major sectors lost ground, with contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the local market, falling 3.36 percent to close at NT$604.00.
TSMC’s losses contributed to the huge dive on the TAIEX, pushing it to its lowest since Dec. 1 last year, when it was 17,473.
However, the tourism sector was relatively resilient, falling 0.03 percent, amid hope that border restrictions would be eased.
Foreign institutional investors sold a net NT$53.45 billion of shares on the main board yesterday, TWSE data showed.
Due to many uncertain factors, such as the Russia-Ukraine conflict, oil prices and what the US Federal Reserve decides to do with its interest rate, international stock markets might be volatile in the near term, analysts said.
In such circumstances, foreign institutional investors are expected to continue selling shares on Taiwan’s equity market, sapping the local market’s performance, analysts said.
In the short to medium term, the Russia-Ukraine conflict, sparring between the US and Russia over the crisis, and whether US sanctions targeting Russia harm the European and US economies are factors that might affect markets, they said.
The effect of soaring prices for crude oil on inflation and a potential interest rate hike by the Fed at its next meeting next month are expected to affect equity markets in Taiwan and abroad, analysts said.
The government will keep a close eye on possible market risks amid the global geopolitical tensions and if necessary would use the National Stabilization Fund and other tools to smooth volatility in the local securities market, the Cabinet said.
The NT$500 billion fund was created as a buffer against unexpected external factors disrupting the local stock market.
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