Taipei, Taiwanese shares plunged again Thursday after the respiratory illness COVID-19, caused by a new coronavirus, was declared a global pandemic by the World Health Organization (WHO) Wednesday, ending 471.43 points lower, or 4.33 percent, to close at 10,422.32.
Turnover totaled NT$270.063 billion (US$8.98 billion), with 103.778 million shares changing hands.
Following a steep 5.8 percent fall on the Dow Jones the previous night after the introduction of a ban on travel from Europe to the United States, the weighted index, the key barometer of the broader market, opened down 48.36 points. When selling set in later, at one point the index plummeted by more than 500 points due to a loss of investor confidence.
During the session, nearly 60 stocks fell by the daily maximum cap of 10 percent, triggering heavy selling pressure, especially on high-tech shares -- the mainstay of the domestic bourse.
Heavyweight electronics shares, such as Largan Precision Co., Taiwan Semicondcutor Manufacturing Company (TSMC) and Hon Hai Precision Industry Co., all suffered heavy losses.
Largan, the most expensive stock on the Taiwan stock market and a supplier of smartphone camera lenses to Apple Inc., finished 9.24 percent lower to end at NT$3,980.
Largan has lost NT$160 million in market value over the past two months, with shares falling 23 percent from their peak of NT$5,210.
Due to the spread of the coronavirus that saw some clients in China not re-start operations until after the Lunar New Year holiday, Largan's consolidated revenue in February registered a month-on-month fall of 11 percent and an annual increase of 45 percent to NT$3.673 billion.
Hon Hai, the world's largest contract home appliance maker and a major assembler of Apple Inc.'s iPhones, lost 4.96 percent ending the day at NT$74.7, while TSMC, the world's No. 1 contract chipmaker, fell 2.65 percent at NT$294.
At a recent online investor conference, Hon Hai said its plants in China have largely resumed business, and the group expects to fully resume normal operations by the end of March.
With the COVID-19 crisis rapidly worsening in the U.S. and Europe, global stock markets have been overcome by a growing panic. As a result, the domestic market may continue to sink in the short-term, testing the 10,000-point mark, analysts said.
Amid weak investor confidence, the weighted index has dropped by more than 900 points this week, suggesting that even a technical rebound in the short-term will not help recover the losses until there are signs of the pandemic easing, they said.
As the short term outlook for Taiwan's market remains pessimistic due to the turmoil on global markets, in particular the U.S. market, it is very likely the domestic market will see its weighted index fall below the 10,000-point mark soon, they forecast.
Meanwhile, Frank Juan (???), deputy minister of finance and executive secretary of the National Stabilization Fund, tried to calm investors, saying the fundamentals of the local bourse remain healthy and the authorities are keeping a close eye on developments.
He added that the state-owned National Stabilization Fund will enter the market if necessary to prevent excessive market instability.
Source: Focus Taiwan News Channel