The TAIEX yesterday closed at its lowest level in two years as investors cut their holdings ahead of the release of US inflation data, expected after press time last night, amid fears that the US Federal Reserve might turn even more hawkish.
Investors also remained cautious about the tech sector ahead of an investors’ conference by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
The TAIEX lost 270.51 points, or 2.07 percent, to close at 12,810.73, the lowest level since Nov. 3, 2020, when the index closed at 12,736.01.
Photo: CNA
Turnover on the main board yesterday totaled NT$208.096 billion (US$6.5 billion), with foreign institutional investors selling a net NT$9.76 billion of shares, Taiwan Stock Exchange data showed.
“The market remains concerned by the rate hike cycle in the US, in particular as Washington will release its CPI [consumer price index] numbers later in the day,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
“Investors fear the September CPI data will present a shock. For now, many investors have trimmed their positions to prevent further losses if the persistent inflation drives the Fed to raise its key interest rates by an additional 75 basis points in November, with another round of hikes in December,” Huang said.
The electronics sector fell 1.40 percent, with the semiconductor subindex losing 1.24 percent.
“Market attention was still focused on TSMC, which will provide guidance for the fourth quarter, as concerns are growing that the export ban will exacerbate current inventory adjustments,” he said.
TSMC fell 0.63 percent to close at NT$395 after failing to sustain its earlier gains.
The chipmaker reported in an investors’ conference that its earnings per share for the third quarter hit a new high of NT$10.83.
Selling also rotated to old-economy stocks yesterday. "At a time of aggressive rate hikes by the Fed and other major central banks in the world, concerns over the impact on the global economy and demand are deepening," Huang said.
The petrochemical sector fell 2.97 percent, with Formosa Petrochemical Corp (台塑石化) falling 3.33 percent, Formosa Plastics Corp (台塑) dropping 2.35 percent, Nan Ya Plastics Corp (南亞塑膠) losing 2 percent and Formosa Chemicals & Fibre Corp (台灣化纖) falling 1.95 percent.
The tourism sector plunged 3.89 percent, even though Taiwan reopened its borders to international travelers yesterday.
“The border reopening was already priced in, while investors heeded inflationary concerns and locked in their gains,” Huang said.
Phoenix Tours International Inc (鳳凰國際) plunged 10 percent and Lion Travel Service Corp (雄獅旅行社) fell 8.14 percent, while Formosa International Hotels Corp (晶華國際酒店) lost 2.36 percent.
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