TAIPEI — Shares in Taiwan trended sharply lower to close below the 8,000-point mark on Wednesday as Taiwanese firms in the Apple Inc. supply chain came under heavy pressure amid lingering concerns over sales of the latest iPhone models, dealers said.
The fears were raised by a disappointing sales report from smartphone camera lens supplier Largan Precision Co. (大立光), which reported a 30-percent month-on-month decline in revenue in December despite the launch of new iPhone models in September, they said.
Led by Largan, the most expensive stock in the local market, high-priced stocks also encountered a sell-off to drag down the weighted index, but airline stocks showed strength after mainland China announced a plan to allow its nationals to transit through Taiwan during their overseas trips, dealers said. North Korea’s Bomb Test
The selling was also sparked by rising geopolitical tensions after North Korea announced it had conducted a hydrogen bomb test, they said.
The weighted index on the Taiwan Stock Exchange closed down 84.72 points, or 1.05 percent, at 7,990.39, after moving between 7,948.43 and 8,076.54, on turnover of NT$98.45 billion (US$29.61 billion).
The market opened down 0.13 percent on follow-through selling from a day earlier as investors shrugged off a relatively flat Wall Street overnight.
Selling escalated after the Largan sales report, which dented investor confidence.
Mega International Investment Services Corp. analyst Alex Huang said that even though the North Korea nuclear test shook regional markets, the selling in Taiwan was mostly tied to economic fundamentals and Largan’s disappointing sales report.
“Largan is one of the most important suppliers to Apple and its sales have served as a barometer of the new iPhones’ sales,” Huang said. “Its lower-than-expected sales for December have left many investors worried about the iPhone shipments. Slowing Demand for New iPhones
“Many investors fear that these Taiwanese suppliers may have an even worse first quarter of this year because of slowing demand for the new iPhones,” Huang said.
Largan fell 7.11 percent to close at NT$1,960.00 after the company on Tuesday reported consolidated sales of NT$3.98 billion for December, down about 30 percent from the NT$5.71 billion recorded in November.
The December figure was also 31 percent lower than a year earlier, and marked the lowest level since February, when it had NT$2.62 billion in sales.
“Largan is a benchmark for other high-priced stocks in the local equity market so its heavy losses caused many other high-priced stocks to trend lower throughout the session,” Huang said.