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Taiwan shares end below 9,000 points, led by large-cap stocks

Taiwan shares end below 9,000 points, led by large-cap stocks

Taipei, Sept. 12 (CNA) Shares in Taiwan faced heavy selling to close below the 9,000-point mark Monday, with large-cap stocks in focus, as market sentiment was badly hurt by concern over an interest rate hike by the U.S. Federal Reserve, dealers said. Among the falling market heavyweights, smartphone camera lens supplier Largan Precision Co. (???) took a beating after an Asian brokerage cut its target price on the stock and urged investors to unload Largan shares by taking advantage of the stock's recent strong showing, the dealers said. The weighted index on the Taiwan Stock Exchange closed down 106.63 points, or 1.18 percent, at the day's low of 8,947.06, off an early high of 9,031.51, on turnover of NT$75.41 billion (US$2.38 billion). Monday's dive followed a 1.21 percent plunge on Saturday, when the local equity market was the only market in the world open for investors as the day was a working make-up day for the upcoming Mid-Autumn Festival holiday. After the sell-off on Monday, the weighted index closed below the psychological level of 9,000 points for the first time since Sept. 2, when the index ended at 8,987.55 points. The market opened down 0.24 percent on follow-through selling from a session earlier, and downward pressure escalated as investors took cues from the weakness of other regional markets, such as Tokyo, Hong Kong and Shanghai, amid rising fears over a rate increase by the Fed, the dealers said. Investors here rushed to dump their holdings in large-cap stocks, such as Largan and Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and many others in the old economy sector, to push down the index to the day's low at the close, they said. "Equity investors here were simply scared by on-going fund outflows from the country that have been caused by higher hopes of the Fed's liquidity tightening," Mega International Investment Services Corp. analyst Alex Huang said, referring to a falling Taiwan dollar. After Boston Fed President Eric Rosengren, who used to be dovish toward a rate hike, said in a speech last week that gradually tightening monetary policy is appropriate for maintaining full employment, "market sentiment has turned very cautious at home and abroad. That's why foreign investors have been moving funds out of the region, betting on a higher U.S. dollar," he said. The bellwether electronics sector closed down 1.23 percent. Largan, a supplier to Apple Inc., fell 3.62 percent to close at NT$3,325.00, with 1.08 million shares changing hands, after an Asian brokerage cut its target on the stock to NT$2,600, the lowest level among the foreign brokerages that track the stock. Contract chip maker TSMC, the most heavily weighted stock in the local market, lost 1.69 percent to end at NT$175.00. Led by a weaker TSMC, the local semiconductor sub-index closed down 1.36 percent. Bucking the downturn on the broader market, Catcher Technology Corp. (??), a metal casing maker, gained 2.14 percent to end at NT$238.50. "It seems that investors parked their funds in smaller stocks for the moment to avoid further selling in market heavyweights, like Largan and TSMC," Huang said. In the non-high tech sector, Formosa Plastics Corp. (??) shed 1.16 percent to close at NT$76.60, and Formosa Chemicals and Fibre Corp. (??) lost 2.40 percent to end at NT$81.50. "I think that foreign institutional investors stood on the sell side today, dragging down these big stocks and plunging the index," Huang said. "Unless foreign investors stop cutting their holdings, the downtrend will not end any time soon." According to the TWSE, foreign institutional investors sold a net NT$15.05 billion-worth shares on the local main board Monday. (By Frances Huang)


Updated : 2021-05-18 23:40 GMT+08:00