Taipei: Shares in Taiwan witnessed a significant downturn on Monday, triggered by substantial tech losses in the United States from the previous week. Concerns arose over the potential monetary policies of Federal Reserve Chair nominee Kevin Warsh, which led to apprehensions about a more hawkish approach, dealers indicated.
According to Focus Taiwan, the Taiex, which is the benchmark index of the Taiwan Stock Exchange, fell by 439.72 points, marking a 1.37 percent decline to close at 31,624.03. The index experienced fluctuations between 31,359.95 and 32,008.46 throughout the day, with a total turnover of NT$740.40 billion (US$23.39 billion).
Market analyst Tom Tang from MasterLink Securities pointed out that Warsh's nomination has sparked fears regarding the Federal Reserve's potential strategy to reduce its balance sheet by pulling funds from the market. This fear not only affected stock markets but also led to a decline in gold and silver prices. Tang also noted that several major players in the local market capitalized on the U.S. tech losses to secure their recent gains before the Lunar New Year holiday. This was reflected in the 0.94 percent drop on the tech-heavy Nasdaq index and a 3.87 percent decrease on the Philadelphia Semiconductor Index.
Among the tech stocks, MediaTek Inc., a smartphone IC designer, fell by 3.12 percent to close at NT$1,705.00. Memory chip suppliers, Nanya Technology Corp. and Winbond Electronics Corp., both hit the maximum daily decline of 10 percent, finishing at NT$294.00 and NT$116.00, respectively. However, TSMC (Taiwan Semiconductor Manufacturing Co.) saw some recovery due to late-session bargain hunting, which helped mitigate the Taiex's losses. TSMC, a significant player with over 40 percent of market value, declined 0.56 percent to close at NT$1,765.00, bouncing back from a low of NT$1,745.00.
In other sectors, Hon Hai Precision Industry Co., an AI server maker and iPhone assembler, dropped by 2.72 percent to NT$214.50, while cooling solutions provider Asia Vital Components Co. defied the trend with a 2.05 percent rise to NT$1,490.00. The old economy sector also faced losses, with Formosa Plastics Corp. falling by 6.34 percent to NT$44.30, and Nan Ya Plastics Corp. decreasing by 6.98 percent to NT$70.60. Shihlin Electric and Engineering Corp. decreased by 5.68 percent to NT$216.00, and Fortune Electric Co. saw a 2.89 percent decline to NT$942.00.
Conversely, China Steel Corp., Taiwan's largest steel manufacturer, saw a 1.69 percent increase to NT$21.10 after reporting a profit in December, and Chun Yuan Steel Industry Co. increased by 1.62 percent to NT$21.90. In the financial sector, which overall lost 0.77 percent, Fubon Financial Holding Co. fell by 0.44 percent to NT$90.50, while Cathay Financial Holding Co. ended down 1.46 percent at NT$74.50.
Tang noted that the Taiex appeared to have technical support near the 20-day moving average of 31,300 points, providing some stability in the current market climate.
According to TWSE, foreign institutional investors sold a net NT$48.12 billion worth of shares on the main board on Monday.
Source: Focus Taiwan