The TAIEX yesterday dropped 1.67 percent, or 144.25 points, to 8,513.3 as the local bourse caught up with declines in advanced markets and reacted to the government’s plan to pull out the National Stabilization Fund next week.
Stock market turnover enlarged to NT$96.54 billion (US$2.98 billion), representing a 43.66 percent pickup from NT$67.2 billion on Friday last week, Taiwan Stock Exchange data showed, as investors returned from the Tomb Sweeping Day holiday.
“The decline came in line with global bourses overnight and merited caution as foreign funds started to flow out,” Yuanta Securities Investment Consulting Co (元大投顧) said in a client note.
Foreign investors trimmed holdings in local shares by NT$6.69 billion net, while mutual funds slashed positions by net NT$510.98 billion, according to stock exchange statistics. Proprietary traders, by contrast, raised stakes by NT$24.33 million.
Minister of Finance Chang Sheng-ford’s (張盛和) comments that the National Stabilization Fund plans to exit on Tuesday helped weigh on the local bourse to sink to a one-month low.
“It is time the fund pulls out and it will do so in the absence of surprise when panelists meet on Tuesday next week,” Chang told the legislature’s Finance Committee yesterday.
The fund has poured more than NT$20 billion to shore up local shares since Aug. 25 last year, the longest streak of intervention since 2000, and helped elevate the TAIEX by 16.83 percent, ministry data showed.
The Executive Yuan has recently appointed new members to oversee the fund of NT$500 billion and the new panel can authorize intervention if it sees fit afterward, Chang said.
On the local bourse, semiconductor firms took the biggest hit with a 2.72 percent fall yesterday.
Shares in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker and the top pick of foreign investors, fell 3.15 percent to NT$153.5, stock exchange tallies indicated.
As of Tuesday, TSMC had gained 10.84 percent this year, outperforming the TAIEX’s 3.83 percent bounce and thereby putting it under more pressure for correction once foreign funds change preference, Yuanta Securities said.
Hon Hai Precision Industry Co (鴻海) shares tumbled 2.17 percent to NT$81.2, as concerns build up over likely diluted cash dividend payouts this year following the company’s offer to buy Japan’s cash-strapped Sharp Corp.
Meanwhile, the insider trading scandal over OBI Pharma Inc (台灣浩鼎) pulled shares in the drug developer down by 6.56 percent to NT$406, bucking the 0.6 percent rise in the TPEX, the benchmark index for shares with small and medium capitalization.
Analysts advised a close watch on fund flows that would dominate market directions.
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