Taipei: Shares in Taiwan moved sharply lower Friday, led by large cap stocks, as investors rushed to pocket recent gains amid growing concerns that the local stock market is overvalued, dealers said. The Taiex, the Taiwan Stock Exchange’s weighted index, ended down 443.53 points, or 1.70 percent, at 25,580.32 after moving between 25,469.04 and 25,998.28. Turnover totaled NT$479.75 billion (US$15.7 billion).
According to Focus Taiwan, before Friday, the benchmark Taiex had soared 1,790.75 points, or 6.88 percent, in September to date. Concord Securities analyst Kerry Huang noted that the local stock market had advanced without any significant pullback, raising concerns over the market’s potential overvaluation. Continued losses in U.S. markets provided an excuse for investors to sell, as Huang mentioned.
Ongoing efforts by the Trump administration to impose tariffs on imports to the United States also cast a shadow over future prospects. The administration recently announced a 100 percent tariff on pharmaceutical products under Section 232 of the U.S. Trade Expansion Act. Huang added that semiconductors are also under similar investigation, causing large cap tech stocks to fall due to fears of a potential substantial tariff.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in Taiwan, fell 1.52 percent to close at NT$1,300.00, sending the electronics index lower by 2.00 percent. Selling spread to other semiconductor stocks, with smartphone IC designer MediaTek Inc. falling 2.60 percent to end at NT$1,310.00 and memory chip supplier Nanya Technology Corp. shedding 7.31 percent to close at NT$71.00.
Bucking the downturn, United Microelectronics Corp., a smaller contract chipmaker, ended up 1.24 percent at NT$44.85. In the tech sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. lost 4.57 percent to close at NT$219.50, and power management solution provider Delta Electronics Inc. dropped 4.07 percent to end at NT$848.00.
After recent strong gains on rotational buying, smaller cap printed circuit board makers also suffered heavy profit-taking. Gold Circuit Electronics Ltd. shed 5.12 percent to close at NT$412.50, and Zhen Ding Technology Holding Limited shed 4.35 percent to end at NT$165.00.
Selling was widespread, with non-tech stocks under heavy pressure throughout the session, Huang said. Falling from previous gains on a spike in copper prices, Hua Eng Wire and Cable Co. lost 3.83 percent to close at NT$3.40, and rival Walsin Lihwa Corp. fell 4.29 percent to close at NT$25.05.
In the old economy sector, King’s Town Construction Co. dropped 2.45 percent to close at NT$45.80, and Farglory Land Development Co. ended down 2.05 percent at NT$62.20. In the financial sector, which appeared resilient, falling only 0.18 percent, Fubon Financial Holding Co. rose 0.58 percent to close at NT$86.50, and Cathay Financial Holding Co. lost 0.91 percent to end at NT$65.10.
“The Taiex fell below a critical technical support level at around 25,770 points, the 10-day moving average, and I expect more losses in the short term,” Huang said. According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$25.19 billion in shares on the market Friday.
