Foreign institutional investors sold off their stock holdings on Taiwan's main exchange at a nearly unprecedented rate Monday, as the situation in Ukraine and soaring international crude oil prices sent markets around Asia tumbling.
In Taiwan, the benchmark Taiex fell 557.83 points, or 3.15 percent, to 17,178.69 on Monday, its lowest close since ending at 17,078.86 on Nov. 4, 2021, on turnover of NT$456.78 billion, the highest in seven months.
Alex Huang (???), an analyst with Mega International Investment Services Corp., said markets were rattled by international crude prices hitting a 14-year high at close to US$140 per barrel because of American and European plans to ban imports of Russian oil.
"Markets were worried that oil prices could spin out of control and push up costs directly or indirectly in several industries, accelerating inflation," he said.
Foreign institutional investors accounted for 56.1 percent of total turnover Monday, buying NT$86.94 billion in shares but selling NT$169.18 billion, for a net sell of NT$82.24 billion, the second highest in history, according to Taiwan Stock Exchange (TWSE) data.
The highest came on Feb. 26, 2021, at NT$94.41 billion, after yields on U.S. 10-year Treasury notes soared, but, tellingly, three of the top 10 net sells in the market's history have come since Russia invaded Ukraine on Feb. 24.
In the seven trading sessions from Feb. 24 to Monday, foreign institutional investors have sold a net NT$250.14 billion, during which time the Taiex has fallen 4.9 percent, TWSE data showed.
On Monday, of the 10 stocks with the biggest net sells by foreign investors, half were among the 20 stocks on the Taiex with the highest market capitalization, including TSMC, the world's largest contract chipmaker, according to TWSE data.
TSMC saw a net sell of 59.33 million shares Monday as it closed 3.15 percent lower at NT$576.
Other big sell-off targets were United Microelectronics, Largan, China Steel, and Hon Hai Precision Industry.
The sell-off also affected the foreign exchange market as foreign institutional investors turned their Taiwan dollar receipts into U.S. dollars.
The U.S. dollar closed at NT$28.25, after closing at NT$28.115 on Friday, on a day when turnover on Taiwan's foreign market totaled US$2.53 billion, the second highest in history.
Taiwan's currency has lost 1.3 percent since Russia invaded Ukraine.
Source: Focus Taiwan News Channel