Taipei: Shares in Taiwan dropped more than 500 points Friday following a significant sell-off on U.S. markets overnight, influenced by renewed concerns that the U.S. Federal Reserve has taken a hawkish stance on its rate-cut cycle, according to dealers.
According to Focus Taiwan, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), closed down 506.06 points, or 1.81 percent, at 27,397.50. The index fluctuated between 27,383.34 and 27,816.45, with a total turnover of NT$588.13 billion (US$18.89 billion). Andy Hsu, an equity market analyst, noted that the steep losses in the U.S., including a 1.65 percent drop on the Dow Jones Industrial Average and a 2.29 percent decline on the tech-heavy Nasdaq index, prompted local investors to secure their recent gains.
Hsu highlighted that the renewed caution toward rate cuts led investors to sell tech stocks on the local main board, with influences from substantial losses in artificial intelligence stocks like Nvidia Corp. Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock, fell by 2.05 percent to NT$1,430.00, contributing approximately 240 points to the Taiex's decline and pushing the electronics index down by 2.21 percent.
Other semiconductor heavyweights also faced declines. MediaTek Inc. dropped 1.20 percent to NT$1,230.00, Nanya Technology Corp. fell 3.06 percent to NT$158.50, and ASE Technology Holding Co. decreased 3.89 percent to NT$222.50. AI-related hardware stocks were similarly affected, with Hon Hai Precision Industry Co. and Quanta Computer Inc. experiencing declines of 4.37 percent and 1.93 percent, respectively.
Despite the downturn in the electronics sector, some investors shifted their focus to non-tech stocks. Uni-President Enterprises Corp. saw a gain of 0.53 percent, closing at NT$75.20, and Charoen Pokphand Enterprise (Taiwan) Co. rose 1.85 percent to NT$137.50. In the textile sector, Eclat Textile Co. increased 1.94 percent to NT$446.50, while Makalot Industrial Co. rose 4.24 percent to NT$307.50.
The financial sector experienced a slight decline of 0.35 percent. Cathay Financial Holding Co. managed a gain of 0.15 percent to NT$66.00, whereas Fubon Financial Holding Co. fell 0.74 percent to NT$93.30. Hsu concluded that the performance of tech stocks indicated that foreign institutional investors were likely on the sell side. With the Taiex falling below the 20-day moving average of 27,867 points, further losses could be anticipated.
According to the TWSE, foreign institutional investors sold a net NT$60.40 billion worth of shares on the main board Friday.