TAIPEI (CNA) — Shares in Taiwan came under heavy downward pressure on Dec. 25 morning after a plunge in stocks in the United States overnight amid concerns that markets there have turned bearish, dealers said.
Selling hit large-cap stocks across the board, in particular in the bellwether electronics sector, to push down the Taiwan Stock Exchange’s benchmark index, the Taiex, more than 100 points to below the 9,500-point mark at one point, they said.
As of 10:55 a.m., the Taiex had fallen 135.64 points or 1.41 percent to 9,504.06, after hitting an early low of 9,479.77, on turnover of NT$39.21 billion (US$1.27 billion). Soon after the market opened, downward pressure set in after the Dow Jones Industrial Average dove 653 points, or 2.91 percent, and the tech-heavy Nasdaq shed 2.21 percent on Dec. 24.
That followed a fall of 6.8 percent in the Dow, its biggest weekly decline since October 2008. “After a recent plunge in the U.S. market, U.S. stocks seem to have entered a bear market,” MasterLink Securities analyst Tom Tang said.
“So investors in the region have become more worried about further volatility on Wall Street, which could send more ripples through regional markets.” Among other regional markets that felt the pinch of the U.S. market losses, the Tokyo market shed more than 4 percent on Dec. 25.
“It was no surprise that such bearish sentiment sparked selling in Taipei as investors rushed to dump market heavyweights, in particular in the bellwether electronics sector,” Tang said.
In the electronics sector, which fell 1.56 percent, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, had fallen 1.59 percent to NT$216.50 with 11.98 million shares changing hands as of 10:55 a.m.
Hon Hai Precision Industry Co., an assembler of iPhones, had fallen 1.40 percent to NT$70.40, and Largan Precision Co., a supplier of smartphone camera lenses to Apple, had dropped 2.45 percent to NT$3,190.00. Selling also spread to old economy and financial stocks amid weak market sentiment, Tang said.
Among the falling non-tech stocks, Formosa Plastics Corp. had lost 1.53 percent to NT$96.80, and Formosa Petrochemical Corp. had shed 2.39 percent to NT$102.00 as of 10:55 a.m. after a steep decline in international crude oil prices overnight.
In the financial sector, Fubon Financial Holding Co. had fallen 1.17 percent to NT$46.30, and Cathay Financial Holding Co. had dropped 0.86 percent to NT$46.10.
Tang felt, however, that “without active participation by foreign institutional investors before the New Year holiday, selling could be capped today.” “But if volatility in global financial markets continues, the local market could test the next technical support at around 9,400 points,” he said.
Since the beginning of this year, foreign institutional investors have sold a net NT$350 billion in shares in the market, according to Tang.
By Frances Huang