Taipei, Taiwan shares took a beating Tuesday morning as selling focused on large cap stocks, in particular in the bellwether electronics and financial sectors, dealers said.
Ahead of stiff technical resistance at around 11,100 points, investors preferred to cut their holdings, ignoring a rally on Wall Street overnight, they said.
As of 10:45 a.m., the weighted index on the exchange, the Taiex, had fallen 112.13 points, or 1.01 percent, to 10,939.67 on turnover of NT$55.79 billion (US$1.82 billion).
The Taiex opened slightly lower and moved in a narrow range initially but selling intensified after 9:30 a.m. to push down the index by more than 100 points.
"I'm surprised the market came under heavy downward pressure, while the Dow Jones Industrial Average soared almost 200 points overnight," MasterLink Securities analyst Tom Tang said.
"Tech heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), an Apple supplier, suffered a plunge to lead the downturn in the broader market," Tang said.
TSMC, the most heavily weighted stock in the local market, had shed 1.71 percent to NT$258.50 as of 10:45 a.m., with 20.18 million shares changing hands. The losses incurred by TSMC took 45 points off the Taiex alone, Tang said.
Led by TSMC, the electronics sector had lost 1.14 percent as of 10:45 a.m.
"Other Taiwanese firms in the Apple supply chain also faced downturns this morning," Tang said. "Behind the selling are worries that sales of the relatively affordable iPhone XR will squeeze Apple's profitability."
Apple unveiled three new iPhones and the more expensive iPhone XS and iPhone XS Max went on sale globally on Sept. 21. The mid-range iPhone XR is scheduled to hit the market later this month.
The 6.5-inch OLED iPhone XS Max is being sold at a starting price of NT$39,900 and the 5.8-inch OLED iPhone XS at NT$35,900 in Taiwan, while the 6.1-inch LCD iPhone will carry a starting price of NT$26,900 here.
Among the falling "Apple concept stocks," iPhone assembler Hon Hai Precision Industry Co. had lost 1.50 percent to NT$78.70, and metal casing maker Catcher Technology Co. had shed 2.19 percent to NT$334.50 as of 10:45 a.m.
Smartphone camera lens supplier Largan Precision Co. bucked the downturn, up 0.27 percent at NT$3,750.00.
Tang said the financial sector, which had served as an anchor stabilizing the local market in recent sessions, also moved lower to add downward pressure on the Taiex.
Mega Financial Holding Co. had lost 1.45 percent to NT$27.10 and CTBC Financial Holding Co. had fallen 1.74 percent to NT$22.55 as of 10:45 a.m.
"Rising trade friction between the United States and China remained a concern to the local financial market, and investors tended to seize on the issue as an excuse to lock in their gains built recently," Tang said.
"If Washington goes ahead to impose a tariff on additional US$267 billion worth of China goods as planned, Taiwanese investors on the market won't be able to avoid the impact."
Tang said the nearest technical support for the market is expected at around 10,900 points.
Source: Focus Taiwan News Channel