Taipei: Shares in Taiwan experienced their steepest daily decline in history on Monday, plummeting over 2,000 points. Investor sentiment was significantly impacted by the tariff actions announced by U.S. President Donald Trump last week, according to dealers.
According to Focus Taiwan, out of the 1,034 stocks traded on the Taiwan Stock Exchange (TWSE), 945 stocks, including the prominent contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), fell by the maximum 10 percent. The decline was attributed to concerns that the tariffs could negatively affect global trade.
The Taiex, which is the TWSE's benchmark weighted index, closed down 2,065.87 points, or 9.7 percent, at 19,232.35. The index fluctuated between 19,212.02 and 20,153.57 throughout the day. This marked the first time the index closed below the 20,000-point benchmark since August 5, 2024, when it ended at 19,830.88. Monday's losses were the steepest in the Taiex's history, surpassing the previous record of 1,807.21 points, also seen on August 5, 2024.
Despite the significant sell-off, the turnover on the local market amounted to only NT$147.295 billion (US$4.44 billion), marking the lowest single-day total in over two years. Mega International Investment Services analyst Alex Huang noted, "The low turnover showed many investors were reluctant to buy the dip as they expect more losses to follow due to the tariff shocks."
On April 2, Trump announced a 10 percent baseline tax on imports from most countries, excluding Russia, North Korea, Cuba, and Belarus, starting April 5. Countries with larger trade surpluses with the U.S. will face higher tariffs starting April 9, including Taiwan at 32 percent, China at 34 percent, Japan at 24 percent, South Korea at 26 percent, Vietnam at 46 percent, and Thailand at 37 percent. China quickly retaliated following Trump's announcement.
"The 32 percent tariff Taiwan faces went beyond what the market had expected, especially after TSMC pledged in March to invest an additional US$100 billion in Arizona to support Trump's advocacy for investment in the U.S. market," Huang said. TSMC, being the most heavily weighted stock, dropped 10 percent to close at NT$848.00, contributing over 750 points to the Taiex's decline and resulting in a 9.71 percent decline in the electronics index.
Huang further noted, "Orders to sell an additional 68 million TSMC shares failed to find buyers today. More selling will follow after the market opens tomorrow as investors fear Trump's tariffs will boost inflation and lead to a recession." Other semiconductor stocks such as MediaTek Inc., United Microelectronics Corp., and Nanya Technology Corp. also fell by the maximum 10 percent.
Non-tech heavyweights were also significantly impacted, contributing to the Taiex's further decline. Companies such as Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals and Fibre Corp., and Formosa Petrochemical Corp. all closed down 10 percent. Additionally, Far Eastern New Century Corp. and China Steel Corp. also shed 10 percent.
The financial sector experienced a 9.89 percent decline, with major companies like Fubon Financial Holding Co. and Cathay Financial Holding Co. falling by the maximum limit. Chang Hwa Commercial Bank ended down 9.14 percent. Only some telecom stocks showed resilience, with smaller declines seen in companies like Chunghwa Telecom Co., Taiwan Mobile Co., and Far EasTone Telecommunications Co.
"There are few signs of any immediate rebound as the Taiex, which resumed trading today after the last session on April 2, needs to incur more losses to match global volatility," Huang stated. Measures to curb short selling were implemented before trading on Monday and will remain in effect through Friday to stabilize the market, although they had little impact on Monday's trading.
According to the TWSE, foreign institutional investors bought a net NT$16.82 billion in shares on Monday.