TAIPEI (CNA) – Shares in Taiwan moved sharply lower Monday, closing down more than 100 points as investors were shocked by heavy losses on the U.S. markets amid worries over an economic slowdown in the U.S. and trade tension between Washington and Beijing, dealers said.
Large-cap stocks in the bellwether electronics sector led the downturn amid weakening global demand for tech gadgets, while selling spread to old economy and financial stocks, push the broader market down further, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended down 113.34 points, or 1.16 percent, at 9,647.54, after moving between 9,626.47 and 9,722.97, on turnover of NT$98.07 billion (US$3.18 billion).
The market opened down 0.39 percent and selling escalated, with tech heavyweights in focus as investors took cues from a tumble in the U.S. markets, where the Dow Jones Industrial Average closed down 558 points, or 2.24 percent, and the tech-heavy Nasdaq index ended down 3.05 percent in the wake of disappointing U.S. job data for November, the dealers said.
The local electronics sector suffered heavier downward pressure, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co., along with the losses incurred by large-cap non-tech stocks to drag down the Taiex by more than 100 points during most of the session, they said.
“The sharp decline in the U.S. markets came after the weaker-than-expected job market report for November, which raised concerns over the growth pace of the world’s largest economy,” Xincheng International Investment Consultant analyst Chang Chih-cheng said.
“Other regional markets followed the Wall Street fall and Taipei was no exception,” Chang said, referring to falls in the Tokyo, Hong Kong, and Seoul markets.
On Friday, Washington reported that the U.S. economy added 155,000 jobs in November, missing a market estimate of an increase of 198,000 jobs. The average hourly wages gained 0.2 percent from a month earlier, shy of an earlier estimate of a 0.3 percent increase.
“Moreover, market sentiment remained bothered by the continued trade dispute between Washington and Beijing,” Chang said. “The arrest of the chief financial officer of China-based Huawei Technologies Co. by Canada at the request of the U.S. has made the trade dispute even more complex.” Last week, Canada confirmed that it had arrested Huawei CFO Meng Wanzhou for the company’s alleged violation of sanctions against Iran. Meng is the daughter of Huawei founder Ren Zhengfei.
Chang said the electronics sector was the largest victim of the rising concerns over global demand for tech devices, in particular, the latest iPhones, amid fears over an economic slowdown in the U.S.
TSMC, the most heavily weighted stock in the local market, lost 0.90 percent to close at NT$219.00, with 19.42 million shares changing hands, as the Taiwanese chipmaker serves as the sole supplier of the processor for the new iPhones.
Also in the electronics sector, Hon Hai, which is believed to take all of the orders placed by Apple to assemble the iPhone XS, shed 2.03 percent to end at NT$67.70, the lowest level since Oct. 5, 2011, when the stock ended at NT$67.60.
Largan Precision Co., a smartphone camera lens supplier to Apple, fell 1.45 percent to close at NT$3,055.00, and Catcher Technology Co., a metal casing supplier to Apple, dropped 6.99 percent to end at NT$219.50. Weakness was also seen among large-cap stocks in the non-tech sector, with Asia Cement Corp. down 1.49 percent to close at NT$33.00. Food brand Uni-President Enterprises Corp. closed down 1.02 percent to end at NT$68.20, and Formosa Plastics Corp. was down 1.00 percent to close at NT$99.50.
In the financial sector, which closed down 0.87 percent, Fubon Financial Holding Co. ended down 1.04 percent at NT$47.50 and Cathay Financial Holding Co. closed 1.14 percent lower at NT$47.60.
“Amid global volatility, the local market could suffer more losses,” Chang said. “But as long as the local main board manages to close above the 9,588-point level, an intraday low of Oct. 31, it will turn technically stable.” According to the TWSE, foreign institutional investors sold a net NT$9.05 billion-worth of shares on the main board Monday.
By Frances Huang