The TAIEX yesterday tumbled 3.15 percent, or 557.83 points, to 17,178.69, while the New Taiwan dollar fell 0.48 percent against the US dollar to NT$28.25, an 11-month low, dragged by capital flight as the US threatened more drastic sanctions against Russia and oil prices skyrocketed, traders said.
Turnover on the main board was NT$456.783 billion (US$16.17 billion), the highest in more than seven months, Taiwan Stock Exchange (TWSE) data showed, while transaction volume hit a 13-year-high of US$2.533 billion on the Taipei Forex Inc during the session.
Minister of Finance Su Jain-rong (蘇建榮) and TWSE officials called for calm amid escalating tensions between Russia and Ukraine, saying that the local board, although pummeled by panic sell-offs, remained healthy in light of active trading and strong economic bellwethers.
Photo: CNA
The ministry is today to release trade data for last month and exports are expected to have grown, despite Lunar New Year holiday disruptions, Su said.
The state-run National Stabilization Fund is closely monitoring the local board and would intervene whenever it sees fit, Su said.
He dismissed claims that the NT$500 billion fund would stay on the sidelines unless the TAIEX slumps below the 10-year moving average.
“There is no need for preconditions to activate the fund,” Su said.
Foreign investors continued to move funds out of Taiwan yesterday, with portfolio managers cutting holdings in local shares by NT$82.24 billion, the second-largest in history and compared with net sales of NT$63.44 billion last week, TWSE data showed.
Mutual funds increased net positions by NT$7.63 billion yesterday, while proprietary traders offloaded NT$3.68 billion of shares, exchange data showed.
Technology heavyweights were again hit by concerns over energy sanctions, with contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) coming into focus as investors unloaded liquid stocks with relatively high valuations.
TSMC lost 3.19 percent to close at NT$576. TSMC’s downturn contributed more than 150 points to the TAIEX’s decline yesterday, and led the electronics sector to drop 3.49 percent and the semiconductor sub-index to lose 3.65 percent.
Amid rising crude prices, Formosa Petrochemical Corp (台塑石化) appeared resilient compared with tech stocks, ending the day unchanged at NT$100.5, while stocks in the steel industry performed better than expected, which traders attributed to expectations that the Western sanctions on Russia would reduce the global steel supply and improve the pricing power of suppliers elsewhere.
The financial sector faced heavy selling, falling 2.74 percent to add pressure to the broader market, traders said.
State-run First Securities Investment Trust Co (第一金投信) said the TAIEX would remain weak in next three months, as it has fallen below the yearly moving average.
The latest panic sell-offs came after the US threatened to impose an oil embargo on Russia and international crude prices soared to near US$140 per barrel, fueling concerns that inflation would erode corporate profits, First Securities said.
Technology shares bore the brunt, as they have higher price evaluations and could be further affected by shortages of component raw materials, a significant portion of which is controlled by Russia, First Securities said.
Investors tend to seek safety in the US dollar in times of global turmoil, dealers said.
TWSE said that the war in Ukraine has little bearing on Taiwan, whose economy is expected to grow by more than 4 percent this year on top of a 6.28 percent pickup last year.
Listed companies in January reported an 8.92 percent increase in cumulative revenue, and would soon distribute cash and stock dividends in line with last year’s impressive earnings, the exchange said.
Additional reporting by CNA
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