The TAIEX yesterday slumped 4.43 percent, or 1,004.01 points, to close at 21,638.09 as investors took cues from Wall Street and dumped tech shares amid unease over signs of economic weakness in the US, analysts said.
Turnover reached NT$517.183 billion (US$15.76 billion) and foreign institutional players slashed positions by NT$96.66 billion after US technology giants Intel Corp and Amazon.com Inc posted disappointing earnings, fueling questions over when artificial intelligence (AI) would generate profit.
Amazon said shoppers are growing more careful with their spending, trading down to lower-priced items when possible.
Photo: CNA
Meanwhile, Intel said it plans to shed 15,000 jobs, reduce capital spending and scrap dividends, in line with cost-saving moves.
Taiwan is home to the world’s major suppliers of electronics used in cloud computing data centers, smartphones, notebook computers, wearables, TVs and cars.
Share prices in local tech firms skyrocketed earlier this year on the back of the AI frenzy, making them susceptible to corrections when things turned around, First Capital Management Inc (第一金投顧) chairman Edward Chen (陳奕光) said.
Chen said the stock rout might persist as the markets digest downside surprises.
Weekly jobless claims in the US rose by 14,000 to 249,000, and its manufacturing purchasing managers’ index for last month slid to 46.8, the weakest in eight months.
The data revived worries over the US economy and the US Federal Reserve might have made a mistake by extending a policy hold on Wednesday, President Securities Investment Consulting Co (統一投顧) said, adding that the EU and the UK cut interest rates by 25 basis points after inflation mitigated.
Proprietary traders joined the selloff by cutting a record NT$38.01 billion of local shares, while mutual funds overbought by NT$11.51 billion, receiving support from retail investors, Taiwan Stock Exchange data showed.
The Financial Supervisory Commission sought to calm unease by issuing a statement yesterday evening, saying it is closely monitoring financial markets at home and abroad and would introduce stabilizing measures, if necessary.
The regulator said it is paying particular attention to short selling and margin trading practices.
Short selling ratios climbed to 2.89 percent of total turnover on Thursday, up from 2.68 percent a week earlier, the commission said.
At the same time, margin maintenance fell slightly from 170.87 percent to 170.33 percent, it said.
The TAIEX yesterday retained more than 20 percent of gains, outperforming bourses in the region, it said, adding that Taiwan’s economic fundamentals remained healthy.
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