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Taiwan shares hammered by turmoil in global markets

Taiwan shares hammered by turmoil in global markets

Taipei, Aug. 21 (CNA) Shares in Taiwan plunged Friday in response to volatility in global equity markets amid worries over sluggish demand in the world economy, dealers said. Selling focused on large-cap stocks across the board, with the bellwether electronics and financial sector facing relatively heavy downward pressure to push the index down to a two-year low at the close, they said. The weighted index on the Taiwan Stock Exchange closed down 242.89 points, or 3.02 percent, at the day's low of 7,786.92, off an early high of 7,941.95, on turnover of NT$101.64 billion (US$3.11 billion). The market opened down 1.41 percent in reaction to a dive on Wall Street overnight, where the Dow Jones Industrial Average fell 2.06 percent to close below the 17,000 mark for the first time since October 2014, dealers said. The sell-off escalated as investors scrambled to unload their holdings in the electronics and financial sectors, and the index trended even lower by the end of the session as turmoil in other regional markets, such as Tokyo, Hong Kong and Shanghai, put even more pressure on local shares, they said. "Wall Street's overnight decline resulted from heavy losses suffered by the China market Thursday. The downturn in the Asian market Friday simply followed Wall Street's dive," Ta Ching Securities analyst Andy Hsu said. "It has been a vicious cycle in the global equity markets. It is possible that Wall Street will continue to fall tonight, triggering additional waves of selling in the Asian markets next week," Hsu said. "I'm not sure where the global downturn will end." Hsu said that heavyweights in the electronics and financial sectors led the broader market's plunge Friday, and "I suspect that selling by foreign institutional investors was the culprit for today's losses." According to the TWSE, foreign institutional investors sold a net NT$7.33 billion (US$224 million) worth of shares on the local main board, where the electronics and financial sectors ended down 3.35 percent and 2.57 percent, respectively. In the high-tech sector, contract chip maker Taiwan Semiconductor Manufacturing Co. (???), the most heavily weighted stock in the local market, fell 3.99 percent to close at NT$121.00.
Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads for Apple Inc., lost 2.17 percent to close at NT$85.50 amid fears over weak demand for consumer electronics gadgets. Among the losing financial stocks, Fubon Financial Holding Co. (???) fell 3.02 percent to close at NT$49.85, and rival Cathay Financial Holding Co. (???) shed 3.41 percent to end at NT$42.50. "As the financial sub-index fell below the 1,000-point level today, sentiment toward this sector has turned more cautious than ever because a slowing economy could hurt financial institutions' bottom lines due to a likely increase in bad loans," Hsu said. After the latest losses, the weighted index fell below the 10-year moving average of 7,789, paving the path for further losses, Hsu said. "There are no technical signs at all to show where the local market will end its losses," he said. (By Frances Huang)


Updated : 2021-09-19 17:16 GMT+08:00