Taipei:Shares in Taiwan saw a significant drop of over 1,100 points on Thursday, attributed to investor concerns over a potential sell-off on Wall Street. This followed heavy losses in Nvidia futures amid a controversy involving its CEO Jensen Huang, according to market dealers.
According to Focus Taiwan, the Taiex, which is the benchmark index of the Taiwan Stock Exchange, closed down 1,165.28 points or 2.63 percent, settling at 43,091.87. The index fluctuated between 42,943.50 and 44,525.24 throughout the day, with a turnover amounting to NT$1.01 trillion (US$30.82 billion).
The market initially traded above the previous closing level for most of the morning session but began to decline around noon. The losses intensified later in the afternoon. Tsai Ming-han, an equity analyst, noted that market sentiment was negatively impacted by an 8 percent decline in Nvidia's shares during after-hours trading. This raised fears among investors that weakness in the integrated circuit designer might affect other AI-related stocks when U.S. markets opened later that day.
Reports emerged that Nvidia's board was considering the removal of CEO Jensen Huang due to allegations concerning his personal relationships. These reports followed Huang's admission of an affair with a woman, who media alleged was a Chinese spy. This development further contributed to the market's cautious stance.
Large-cap electronics stocks were major contributors to the Taiex's decline. Taiwan Semiconductor Manufacturing Co., a significant player in the market with over 40 percent of total capitalization, reversed its earlier gains to close down 2.30 percent, contributing approximately 440 points to the Taiex's decline. Other semiconductor stocks, such as MediaTek Inc., Nanya Plastics Corp., and ASE Technology Holding Co., also experienced losses.
Despite the overall market weakness, Hon Hai Precision Industry Co. showed resilience, falling only 0.83 percent amid anticipation of positive outcomes from an investor conference scheduled post-market.
Investors shifted their focus towards defensive stocks in the telecommunications and food sectors. Companies like Uni-President Enterprises Corp. and Great Wall Enterprise Co. saw gains, along with Taiwan Mobile Co. and Chunghwa Telecom Co.
The financial sector experienced a minor decline of 0.05 percent, with mixed performances from companies like CTBC Financial Holding Co. and Fubon Financial Holding Co.
There was speculation that the National Financial Stabilization Fund might have intervened to stabilize the market. The fund's management had authorized such intervention the previous week to mitigate volatility. Additionally, foreign institutional investors sold a net NT$684.50 million worth of shares on the main board.
Source Focus Taiwan
