Taipei-- Shares in Taiwan closed lower Thursday to below the the nearest technical resistance level of 10,500 points due to a slump at the opening of the futures market, dealers said.
Prices on Taipei's stock futures market opened sharply lower, with the Taiwan Stock Exchange (TAIEX) Capitalization Weighted Index for August falling suddenly by the day's maximum of 1,045 points to 9,408 at 8:45 a.m. for unknown reasons, automatically triggering stop-limit orders by investors to sell their futures contracts.
The incident caused chaos in the financial market, dragging down the local stock market.
The TAIEX closed down 49.39 points, or 0.47 percent, at 10,469.88, after moving between 10,427.72 and 10,478.62 on turnover of NT$106.95 billion (US$3.61 billion).
Almost all the major stock categories lost ground except for plastics and steel shares, which gained 0.32 percent and 0.17 percent, respectively.
Following a 0.66 drop in the PHLX Semiconductor Sector Index, the electronics sub-index fell 0.55 percent, mainly due to a 1.09 percent loss faced by the semiconductor sector.
Several major semiconductor companies, including contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, and integrated circuit designer MediaTek Inc. (???), suffered losses.
The falling semiconductor stocks also included United Microelectronics Corp. (??), a smaller rival of TSMC.
Analyst Wang Chao-li (???) said that the stock market is expected to remain stable, with few fluctuations in the short term.
Foreign institutional investors sold a net NT$5.62 billion-worth of shares on the main board on Thursday, according to the Taiwan Stock Exchange.
TAIEX Index futures for August ended down 47 points to close at 10,406, with 135,087 contracts changing hands.
Source: Focus Taiwan News Channel