The TAIEX yesterday took a beating, plunging more than 200 points as worries over cross-strait tensions escalated ahead of an expected visit by US House of Representatives Speaker Nancy Pelosi.
Selling was seen across the board, affecting large-cap stocks in both the electronic and non-tech sectors, while turnover remained moderate, indicating many investors were reluctant to buy during the dips amid fears China would take retaliatory action in response to Pelosi’s visit.
The TAIEX closed down 234.46 points, or 1.56 percent, at 14,747.23. Turnover totaled NT$214.876 billion (US$7.16 billion), with foreign institutional investors selling a net NT$19.66 billion of shares on the main board, Taiwan Stock Exchange data showed.
Photo: CNA
“Due to Pelosi’s expected visit, tensions across the Taiwan Strait have risen,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang said (黃國偉) said. “Any equity market is vulnerable to political leads like this and that is why the TAIEX came under heavy pressure throughout the session.”
Pelosi, who embarked on an Asian tour on Sunday, was scheduled to arrive in Taiwan yesterday night, according to foreign and local media reports.
She was expected to visit the Legislative Yuan in Taipei and meet with President Tsai Ing-wen (蔡英文) this morning before wrapping up her short trip, the reports said.
“It was no surprise that investors rushed to cut their holdings today to avoid further losses down the road,” Huang said. “Few investors appeared willing to pick up bargains, despite the heavy losses, which kept turnover moderate.”
The sell-off took a toll on the bellwether electronics sector, which includes many liquid large-cap stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), which tumbled 2.38 percent, and led to the electronics and semiconductor sub-indices losing 1.84 percent and 2.39 percent respectively.
The transportation sub-index, which includes major shipping and airline stocks, was also hit hard, falling 2.76 percent and adding downward pressure to the broader market.
The food sub-index slid 2.15 percent following China’s imposition of a ban on products from more than 100 Taiwanese companies.
“Today’s sell-off drove the TAIEX below the nearest technical resistance at about 14,900 points. I think fragile market sentiment will result in more selling,” Huang said. “The National Stabilization Fund could intervene in the event of more losses.”
The NT$500 billion stabilization fund has since July 12 been authorized to intervene in the equity market to serve as a buffer against unexpected external factors.
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
RSS