Taipei, Aug. 15 (CNA)－Taiwan shares moved sharply lower Wednesday morning amid lingering concerns over a financial crisis in Turkey as investors ignored an overnight rebound on Wall Street, dealers said.
Selling focused on large cap stocks, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), to push the broader market below the nearest technical support at the 240-day moving average of 10,779 points, they said.
The fall came even after the Dow Jones Industrial Average stopped a four-day slide overnight by closing 0.45 percent higher.
“Market sentiment remained haunted by worries over the financial situation in Turkey, which has seen the value of its currency take a dive,” Hua Nan Securities analyst Kevin Su said.
The Turkish lira, which has lost more than 20 percent against the U.S. dollar in the past two months, rebounded slightly overnight, but Su said the gains were technical in nature and the downward trend remained unchanged.
“That has led many investors in the region to fear that other currencies in emerging economies will follow suit,” Su said.
“Regional currencies such as the Chinese yuan and the Taiwan dollar cannot escape the trend for the time being.”
The U.S. dollar index, which tracks the greenback’s strength against a group of six major currencies, hit a high of 96.82 on Tuesday, the highest since late June 2017.
“The weakness of the currencies in the region has sparked worries over foreign fund outflows, which is the last thing stock markets want. It is understandable that equity investors are dumping stocks now,” Su said, referring to sell-offs in Taipei, Shanghai and Hong Kong.
In Taipei, Su said, investors rushed to dump liquid market heavyweights in exchange for cash to avoid further losses down the road. “Judging from the movement, the downturn was triggered by stop loss selling,” Su said.
Among the falling large cap stocks, TSMC, the most heavily weighted stock in the local market, had fallen 1.64 percent to NT$239.50 as of 11:45 a.m.
Because TSMC shares fell below Tuesday’s intraday low of NT$242.50, Su suggested a further decline in the stock was possible.
Selling was also seen in other stocks with Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., down 4.21 percent at NT$4,435.00 and Formosa Plastics Corp. down 1.37 percent at NT$108.00 as of 11:45 a.m.