Taiwan shares plunge on coronavirus fears, drop in oil prices

CNA file photo

TAIPEI (CNA) — Taiwan shares fell sharply Monday morning as investor sentiment was hurt by heavy losses on U.S. futures amid growing concerns over the spread of COVID-19 coronavirus in the United States and Europe and a steep drop in oil prices, dealers said.

As of 11:19 a.m., the weighted index on the Taiwan Stock Exchange (Taiex) had plunged 225.17 points, or 1.99 percent, to 11,096.64 points. Turnover was NT$146.58 billion (US$4.89 billion).

“The global equity markets remained bothered by the COVID-19 contagion worldwide,” MasterLink Securities analyst Tom Tang said. “Concerns over the spread of the virus in the U.S. and Europe are sending ripples through the global markets, and Taiwan is no exception. The global economy is expected to continue to suffer once the epidemic continues.”

On Sunday, futures contracts on the Wall Street benchmark S&P 500 index fell more than 4 percent, signaling a possible poor start to trade in the U.S. on Monday.

In Japan, equity stocks plunged about 6 percent at one point Monday morning.

“In Taiwan, traders rushed to dump large cap stocks like Taiwan Semiconductor Manufacturing Co. (TSMC), and I think the selling was largely by foreign institutional investors,” Tang said.

As of 11:19 a.m., contract chipmaker TSMC, the most heavily weighted stock on the local market, had fallen 1.90 percent to NT$309.00. Led by TSMC, the bellwether electronics sector and the semiconductor sub-index were down 1.99 percent and 2.02 percent, respectively.

Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co., second only to TSMC in terms of market capitalization, had dropped 1.24 percent to NT$79.80, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., had plunged 2.52 percent to NT$4,450.00.

Selling on the main board was also spurred by a steep drop in international crude oil prices as Saudi Arabia reportedly was preparing to increase its crude oil production, dealers said.

In the morning session, Formosa Petrochemical Corp. fell 4.48 percent to NT$83.20, and Formosa Plastics Corp. was down 2.08 percent at NT$89.50 at one point.

“With the global economy overshadowed by uncertainty over theCOVID-19 epidemic, no one can be sure when the domestic and global equity markets will begin to turn around,” Tang said.

After seeing the losses on the main board Monday, Finance Minister Minister Su Jain-rong (蘇建榮) said in a legislative hearing that the National Financial Stabilization Fund and has been keeping a close eye on the global financial markets and is standing by to enter the local market if necessary.

The NT$500 billion stabilization fund was set up in 2000 by the government to serve as a buffer against unexpected external factors disrupting the local bourse.