Taipei: Shares in Taiwan took a significant hit, diving more than 770 points Tuesday, as a result of a sell-off triggered by the ongoing military conflict in the Middle East. This unrest has led to a surge in international crude oil prices, affecting markets globally, dealers reported.
According to Focus Taiwan, the Taiex, Taiwan Stock Exchange's (TWSE) benchmark index, closed down 771.44 points, or 2.20 percent, reaching the day's low of 34,323.65. The turnover hit NT$1.058 trillion (US$33.52 billion), marking the second-highest in history, only surpassed by NT$1.208 trillion on February 26.
Initially, the market attempted a rebound during the early morning session after a 0.90 percent decline on Monday. However, selling pressures reemerged, particularly impacting large-cap electronics stocks that had previously driven Taiex gains, dealers noted.
Concord Capital Management analyst Lu Chin-wei commented, "Look at other regional markets, Tokyo and Seoul, which came under heavy pressure this morning. There was no immediate end to the military actions in the Middle East." Lu further explained that local investors shifted towards selling after initial gains, as the spike in crude prices raised concerns about inflation and its economic impact.
Tech heavyweights were heavily targeted in the sell-off, resulting in a 2.61 percent drop in the electronics index. Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), a major market player, fell 2.03 percent to close at NT$1,935.00, contributing approximately 320 points to the Taiex's decline.
Other semiconductor stocks also suffered; MediaTek Inc. saw a 4.47 percent drop to NT$1,815.00, while ASE Technology Holding Co. decreased by 2.97 percent to NT$359.50. Memory chip suppliers Macronix International Co. and Nanya Technology Corp. each plummeted 10 percent, the maximum daily decline, closing at NT$104.50 and NT$256.50, respectively.
In the broader tech sector, Delta Electronics Inc. slid 5.96 percent to NT$1,340.00, and Hon Hai Precision Industry Co. dropped 4.18 percent to NT$229.00.
Lu pointed out that raw material stocks also faced challenges amid inflation fears affecting consumption. Nan Ya Plastics Corp. dropped 5.07 percent to NT$85.00, Formosa Plastics Corp. fell 1.48 percent to NT$49.95, China Steel Corp. decreased by 0.99 percent to NT$20.05, and Chung Hung Steel Corp. shed 2.77 percent to NT$17.55.
Contrasting the downturn, the financial index showed a slight rise of 0.12 percent. Fubon Financial Holding Co. edged up by 0.11 percent to NT$93.10, while Mega Financial Holding Co. increased 0.50 percent to NT$40.40. Lu speculated that government-led funds may have supported these gains, even as foreign institutional investors continued to reduce their holdings.
According to the TWSE, foreign institutional investors sold a net NT$94.71 billion of shares on the main board Tuesday.