Taipei: Shares in Taiwan took a hit Monday following the United States’ bombing of three nuclear sites in Iran over the weekend, dealers reported. Concerns over escalating political tensions in the Middle East affected investor sentiment, leading to significant declines on the Taiwan Stock Exchange.
According to Focus Taiwan, the Taiex, which is the weighted index of the Taiwan Stock Exchange, fell by 313.72 points or 1.42 percent, closing at 21,732.02. The index fluctuated between 21,551.58 and 21,801.32 throughout the day, with a total turnover of NT$307.601 billion (US$10.36 billion).
The market experienced heavy pressure immediately after opening, with a 1.33 percent decline driven by fears that the military conflict between Israel and Iran might escalate. Although some bargain hunters later became active, picking up select tech and financial heavyweights, the Taiex closed below the nearest technical support level of 21,796 points, which is the 20-day moving average.
Concord Securities analyst Kerry Huang noted that “the U.S. strike complicated the conflicts in the Middle East, and the Taiex simply reacted to growing geopolitical unease today.” Huang added that with U.S. President Donald Trump suggesting the possibility of regime change in Iran, there are increasing concerns that Washington might deploy ground forces, further exacerbating the situation.
Despite these challenges, some investors showed interest in bargain hunting within the electronics and financial sectors, which helped limit the downturn. Notably, MediaTek Inc., a smartphone IC designer, rose 0.40 percent to close at NT$1,255.00, while ASE Technology Holding Co., an IC packaging and testing services provider, gained 1.73 percent to end at NT$147.00. Hon Hai Precision Industry Co. also saw a rise of 0.32 percent to close at NT$156.00.
However, Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the Taiex, experienced a 3.32 percent drop to end at NT$1,020.00, contributing significantly to the Taiex’s overall fall. Huang attributed TSMC’s underperformance to reports that Washington is considering ending waivers that allow the chipmaker and others to send American technology to China.
In the financial sector, Cathay Financial Holding Co. rose 0.46 percent to close at NT$65.90, while Fubon Financial Holding Co. managed to limit its losses, ending down 0.24 percent at NT$84.70 after recovering from earlier lows.
The performance in old economy industries was mixed. The petrochemical industry saw a 0.25 percent increase following a rise in international crude oil prices. Formosa Petrochemical Corp. and Formosa Plastics Corp. posted gains, while Formosa Chemicals and Fibre Corp. fell. In contrast, Universal Cement Corp. and TCC Group Holdings Co. experienced declines, whereas Shihlin Electric and Engineering Corp. and Fortune Electric Co. saw gains.
Huang advised investors to monitor whether Iran would shut down the Strait of Hormuz, as such a move could further increase crude oil prices and add inflationary pressures.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$15.21 billion in shares on the market on Monday.