Shares plunge as high-tech companies suffer heavy losses amid global market concerns
Shares in Taiwan took a beating Wednesday as the bellwether electronics sector encountered heavy downward pressure amid concerns over the market outlook of the global semiconductor business, dealers said.
Taiwan Semiconductor Manufacturing Co. (TSMC, ), the world’s largest contract chip maker, was the focus of the sell-off as investors appeared anxious ahead of an investor conference scheduled by the wafer foundry operator for Thursday, they said.
Selling also spread to the old economy and financial sector, in the late trading session in particular, further pushing down the broader market at the end of the session, they said.
The weighted index on the Taiwan Stock Exchange ended down 102.16 points, or 1.05 percent, at 9,540.06, after moving between 9,508.14 and 9,654.15, on turnover of NT$113.15 billion (US$2.62 billion).
The market opened down 0.11 percent on follow-through selling from a session earlier, but staged a mild technical rebound in the early morning session, dealers said.
With the index moving closer to the 9,700 point mark, however, selling set in to drag down the broader market into negative territory again, and the weakness continued until the end of the session with semiconductor chips weighing most heavily on investors’ minds, they said.
Investors Cut Holdings in
“Many investors remained wary of the prospects of the global semiconductor business at a time when a stronger U. S. dollar has boosted inventory levels of many U. S. high- tech vendors,” Mega International In- vestment Services Corp. analyst Alex Huang said.
“In particular before TSMC, the most closely watched chip maker in the local market, gives its guidance about the second quarter, cautious i nvestors tended to cut their holdings for the moment in a bid to prevent possible losses resulting from the investor conference,” Huang said.
Huang said that the selling in the local semiconductor sector also followed a 0.95 percent fall of the Philadelphia Semiconductor Index on Wall Street overnight.
The local semiconductor subindex ended down 1.49 percent and the electronics sub- index closed down 1.36 percent.
TSMC fell 0.69 percent to close at NT$ 143.00, off an early low of NT$ 141.50.
“I suspected selling in TSMC shares came from foreign institutional investors but government- led funds picked up bargains after the foreign institutional selling to help the stock recoup part of its earlier losses,” Huang said.
According to the TWSE, foreign institutional investors sold a net NT$ 21.62 billion worth of local shares on the main board.
Among other falling integrated circuit stocks, contract chip maker United Microelectronics Corp. ( ) lost 3.64 percent to close at NT$ 14.55, and IC designer MediaTek Inc. (
) shed 3.98 percent to end at NT$ 398.50.
Bucking the downturn in the broader market, smartphone camera lens supplier Largan Precision Co. ( ) rose 2.62 percent to close at NT$ 2,745.00 after several foreign institutional investors upgraded their target prices on the stock. Largan is also scheduled to hold an inves-
tor conference Thursday.
Asia Cement Corp, ( ) lost 1.28 percent to end at NT$38.50, food maker Uni-President Enterprises Corp. ( ) fell 1.36 percent to close at NT$50.80, and property developer Huaku Development Co. ( ) shed 1.62 percent to end at NT$67.00.
“After today’s sell-off, the local bourse has become technically weaker.
The 9,500-point mark will be critical for the equity market and if the index falls below that level, further selling will follow,” Huang said.
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