Taipei:Taiwan shares experienced a significant downturn, recording their fourth-largest single-day point loss on Friday. The Taiex, Taiwan Stock Exchange's key index, closed at 39,701.64, falling by 1,873.08 points or 4.51 percent. This drop came amid an overnight sell-off on Wall Street, although the market showed signs of recovery from its intraday low due to potential government interventions, as noted by market dealers.
According to Focus Taiwan, the Taiex faced heavy pressure at the opening of trading, with a sharp decline of about 3,700 points, primarily driven by losses in artificial intelligence-related stocks. This sell-off was linked to concerns over potential restrictions on AI data center development following the Democrats' victories in the U.S. midterm elections, which included control of both chambers of Congress and gubernatorial wins in key states like Texas.
Bargain hunters emerged around noon, alleviating some selling pressure, as the Financial Supervisory Commission (FSC) announced plans to discuss possible measures to support the market later in the day. Additionally, the committee overseeing the National Financial Stabilization Fund indicated a possible special meeting to decide on market intervention.
Taiwan Semiconductor Manufacturing Co. (TSMC), a major player with over 40 percent market capitalization, recovered from an earlier 10 percent decline to close down 4.69 percent at NT$2,135.00. This recovery helped the Taiex regain about 920 points. Other semiconductor firms, such as MediaTek Inc. and Nanya Technology Corp., also rebounded from earlier declines.
In the broader technology sector, Hon Hai Precision Industry Co. and Delta Electronics Inc. faced losses, closing down 4.47 percent and 6.64 percent, respectively. The financial sector was also under pressure, with Cathay Financial Holding Co. and Fubon Financial Holding Co. seeing significant declines.
Despite the overall market downturn, some investors turned to safe-haven stocks. Fortune Information Systems Corp. and System Corp. saw gains, while selective biotech stocks like Chunghwa Chemical Synthesis & Biotech Co. and ScinoPharm Taiwan, Ltd. also experienced upward movements.
Analyst Adam Lin of Moore Securities Investment Consulting expressed caution, stating it was too early to determine when the Taiex might recover from the current slump. He emphasized the importance of monitoring the FSC's forthcoming decisions to support the market.
The Taiwan Stock Exchange reported that foreign institutional investors sold a net NT$91.19 billion worth of shares on the main board Friday.
