Taipei:Shares in Taiwan experienced the seventh steepest single-session point decline on Tuesday, driven by a significant sell-off in the electronics sector. This downturn was influenced by a sharp drop in tech stocks in the United States overnight, which raised concerns about substantial AI spending, according to market dealers.
According to Focus Taiwan, the Taiex, Taiwan Stock Exchange's benchmark index, fell by 1,612.60 points, or 3.59 percent, closing at 43,307.54. The index fluctuated between 43,191.58 and 44,614.64 throughout the day, with a total turnover reaching NT$928.06 billion (US$28.48 billion), compared to NT$799.69 billion on Monday.
Concord Securities analyst Kerry Huang attributed the expanded turnover to investor panic, as many scrambled to reduce their holdings upon witnessing significant losses in AI-related stocks on U.S. markets. Huang highlighted the Philadelphia Semiconductor Index's 3.37 percent fall and the Nasdaq index's 1.07 percent drop as key factors affecting sentiment. Additionally, Huang pointed out the potential financial challenges faced by large cloud service providers due to high yields impacting their ability to deliver comfortable returns.
Key semiconductor stocks were hit hard, with Taiwan Semiconductor Manufacturing Co. (TSMC) falling 1.50 percent to NT$2,295.00, contributing approximately 280 points to the Taiex's decline. MediaTek Inc. and ASE Technology Holding Co. experienced losses of 7.43 percent and 8.61 percent, respectively. Nanya Technology Corp. saw a maximum daily drop of 10 percent, ending at NT$411.00, following losses by South Korean memory chip suppliers.
In other tech sectors, Hon Hai Precision Industry Co. and Delta Electronics Inc. also suffered losses, with declines of 2.19 percent and 6.27 percent, respectively. The sell-off spread to non-tech stocks, with the financial sector decreasing by 2.54 percent. Fubon Financial Holding Co. and Cathay Financial Holding Co. ended lower by 3.45 percent and 2.59 percent, respectively.
Some investors sought refuge in defensive stocks, with Uni-President Enterprises Corp. and Formosa Oilseed Processing Co. experiencing slight gains. EVA Airways and China Airlines also saw marginal increases in their stock prices.
Huang noted that caution regarding the U.S. midterm elections further pressured the market. He warned that the Taiex could face additional losses, potentially testing the intraday low of 39,384 points recorded on July 29. The Taiwan Stock Exchange reported that foreign institutional investors sold a net NT$107.31 billion worth of shares on the main board Tuesday.
