Taipei, Taiwan shares took a beating Tuesday morning in the wake of heavy losses on American markets overnight, falling more than 200 points at one point before some bargain hunting set in, dealers said.
With Apple Inc. shares plunging sharply overnight amid concerns over iPhone shipments, Taiwanese smartphone camera lens supplier Largan Precision Co. came under pressure to fall below the NT$3,000 mark (US$97.09) before recovering, they said.
As of 11:18 a.m., the weighted index on the Taiwan Stock Exchange, the Taiex, had fallen 135.04 points, or 1.37 percent, to 9,696.17, off an early low of 9,616.16. Turnover was NT$63.30 billion.
Investors reacted to a more than 600-point plunge on the Dow Jones Industrial Average overnight, with Apple shares shedding 5.04 percent after JP Morgan cut Apple's target price, citing poor orders for the new iPhone XR.
"Not only shares in Taipei, but also shares in other regional markets felt the pinch of the plunge in the Dow," MasterLink Securities analyst Tom Tang said, referring to Hong Kong, Tokyo and Seoul.
"In Taiwan in particular, investors rushed to dump Apple's suppliers as rising fears over slowing iPhone shipments will take a toll on their profitability," Tang said.
"Even though Apple launched the more affordable iPhone XR, it failed to receive a warm welcome by its fans."
Largan, which gets about 40 percent of its sales revenue from Apple, was down 0.66 percent to NT$3,030.00 after hitting an early low of NT$2,875, the lowest the stock had been since July 7 when it closed at NT$2,975.
As of the end of trading Monday, Largan shares had fallen more than 45 percent from an intraday high of NT$5,330 seen on Aug. 1 amid lingering worries over iPhone sales.
Institutional investors have cut their holdings of Largan since the beginning of this year. Their share of the company was 52.31 percent on Monday, compared with 55.82 percent seen at the start of the year.
Among other "Apple concept stocks," contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, had lost 2.38 percent to NT$226.00, and iPhone assembler Hon Hai Precision Industry Co. had dropped 2.49 percent to NT$74.30 as of 11:18 a.m.
The bellwether electronics sector had lost 1.73 percent after the tech heavy Nasdaq index lost 2.78 percent overnight.
"The silver lining was that some old economy stocks, in particular in the cement and food sector, attracted bargain hunting, which offset the losses suffered by tech stocks to some extent and lent some support to the broader market," Tang said.
Among the gaining old economy stocks, Taiwan Cement Corp. had risen 0.70 percent to NT$35.85, and food brand Uni-President Enterprises Corp. had added 1.93 percent to NT$73.80 as of 11:18 a.m.
"I suspect the buying came from government-led funds in a bid to keep the Taiex from falling further," Tang said.
"But market sentiment has turned weaker as many investors here expect that more volatility in the U.S. market will continue to affect shares in the region," Tang said.
Source: Focus Taiwan News Channel