Do­mes­tic shares ham­mered by tur­moil in in­ter­na­tional mar­kets

The China Post - - BUSINESS -

Shares in Tai­wan plunged Fri­day in re­sponse to volatil­ity in global eq­uity mar­kets amid wor­ries over slug­gish de­mand in the world econ­omy, deal­ers said.

Selling fo­cused on large-cap stocks across the board, with the bell­wether elec­tron­ics and fi­nan­cial sec­tor fac­ing rel­a­tively heavy down­ward pres­sure to push the in­dex down to a two-year low at the close, they said.

The weighted in­dex on the Tai­wan Stock Ex­change closed down 242.89 points, or 3.02 per­cent, at the day’s low of 7,786.92, off an early high of 7,941.95, on turnover of NT$101.64 bil­lion (US$3.11 bil­lion).

The mar­ket opened down 1.41 per­cent in re­ac­tion to a dive on Wall Street overnight, where the Dow Jones In­dus­trial Av­er­age fell 2.06 per­cent to close be­low the 17,000 mark for the first time since Oc­to­ber 2014, deal­ers said.

The sell-off es­ca­lated as in­vestors scram­bled to un­load their hold­ings in the elec­tron­ics and fi­nan­cial sec­tors, and the in­dex trended even lower by the end of the ses­sion as tur­moil in other re­gional mar­kets, such as Tokyo, Hong Kong and Shang­hai, put even more pres­sure on lo­cal

shares, they said.

Fol­low­ing Wall Street Dive

“Wall Street’s overnight de­cline re­sulted from heavy losses suf­fered by the China mar­ket Thurs­day. The down­turn in the Asian mar­ket Fri­day sim­ply fol­lowed Wall Street’s dive,” Ta Ching Se­cu­ri­ties an­a­lyst Andy Hsu said.

“It has been a vi­cious cy­cle in the global eq­uity mar­kets. It is pos­si­ble that Wall Street will con­tinue to fall tonight, trig­ger­ing ad­di­tional waves of selling in the Asian mar­kets next week,” Hsu said. “I’m not sure where the global down­turn will end.”

Hsu said that heavy­weights in the elec­tron­ics and fi­nan­cial sec­tors led the broader mar­ket’s plunge Fri­day, and “I sus­pect that selling by for­eign in­sti­tu­tional in­vestors was the cul­prit for to­day’s losses.”

Ac­cord­ing to the TWSE, for­eign in­sti­tu­tional in­vestors sold a net NT$7.33 bil­lion (US$224 mil­lion) worth of shares on the lo­cal main board, where the elec­tron­ics and fi­nan­cial sec­tors ended down 3.35 per­cent and 2.57 per­cent, re­spec­tively.

In

High-tech Sec­tor

the

high- tech

sec­tor, con­tract chip- maker Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. ( ), the most heav­ily weighted stock in the lo­cal mar­ket, fell 3.99 per­cent to close at NT$121.00.

Hon Hai Pre­ci­sion In­dus­try Co. ( ), an as­sem­bler of iPhones and iPads for Ap­ple Inc., lost 2.17 per­cent to close at NT$85.50 amid fears over weak de­mand for con­sumer elec­tron­ics gad­gets.

Among the los­ing fi­nan­cial stocks, Fubon Fi­nan­cial Hold­ing Co. ( ) fell 3.02 per­cent to close at NT$49.85, and ri­val Cathay Fi­nan­cial Hold­ing Co. (

) shed 3.41 per­cent to end at NT$42.50.

“As the fi­nan­cial sub-in­dex fell be­low the 1,000-point level to­day, sen­ti­ment to­ward this sec­tor has turned more cau­tious than ever be­cause a slow­ing econ­omy could hurt fi­nan­cial in­sti­tu­tions’ bot­tom lines due to a likely in­crease in bad loans,” Hsu said.

Af­ter the latest losses, the weighted in­dex fell be­low the 10-year mov­ing av­er­age of 7,789, paving the path for fur­ther losses, Hsu said.

“There are no tech­ni­cal signs at all to show where the lo­cal mar­ket will end its losses,” he said.

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