Noah Weston, Special to The China Post
Investors carved off 189.73 points, or 3.76 percent, from the TAIEX yesterday in reaction to both a dismal overnight performance on the Nasdaq and pessimistic news from TSMC over near-term prospects for the chip foundry business. The 4,855.34 close was the lowest for the index since Dec. 4, 2001. Volume came in light at NT$52.47 billion for the session.
“Taking their lead from the falls in TSMC ADRs and Nasdaq overnight, investors were selling out so as to cut their losses,” said Entrust Securities Investment Consulting Corp. assistant vice president Tom Tan. Crushing investor hopes for a continuation of Wall Street’s rally on Wednesday, the Nasdaq shed 50.15 points to 1,240.08 overnight, a nearly four percent dip. TSMC was one of the frontrunners in the carnage, with its New York Stock Exchange-listed ADRs falling 18.5 percent to US$9.08 after the company announced quarterly results shy of estimates and plans to slash its capital spending budget. The reverberations here sent the electronics subindex down a hefty 5.33 percent, with sell orders for chip concerns and other tech issues waiting in line for the opening bell today. Locally, TSMC shares followed the lead of their brethren in the U.S., ending limit-down NT$4 at NT$54. Rival United Microelectronics (UMC) was also limit-down, closing the session at NT$33.5. Dealers expect further rough waters ahead, given low turnover and an absence of bargain hunting during the market’s beating yesterday.