Shares in Taiwan came under pressure Wednesday, as worry escalated over a cluster of domestic COVID-19 cases at a preschool in New Taipei, dealers said.
While selling was seen across the board, however, late buying in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) offset its earlier losses and helped cap the downturn of the broader market, dealers said.
The Taiex, the weighted index on the Taiwan Stock Exchange, ended down 158.38 points, or 0.91 percent, at 17,270.49, after moving between 17,167.08 and 17,447.58. Turnover totaled NT$321.087 billion (US$11.59 billion).
The market opened down 0.10 percent, and selling escalated in the afternoon session, sending the Taiex plunging by more than 260 points at one point to the day's low, dealers said.
Late in the trading session, however, bargain hunters turned active, picking up shares of TSMC and other market heavyweights, which helped the Taiex to recover some of its earlier losses and finish above 17,200 points, dealers added.
"The reported COVID-19 cluster at a preschool in New Taipei has sparked fears that the government will raise the coronavirus alert to Level 3 again," Concord Securities analyst Kerry Huang said.
He said the reports that some of the infections in that cluster were caused by the Delta variant of the COVID-19 virus were most worrying.
"If the government decides to tighten the COVID-19 prevention restrictions, industries that are reliant on domestic demand would suffer even more, which is why market sentiment was hurt today," Huang said.
According to the Central Epidemic Command Center (CECC), the number of COVID-19 cases in the cluster linked to the New Taipei preschool grew to 23 on Wednesday, with 10 of them confirmed to have been caused by the Delta variant, while the test results to determine the variants in the other 13 cases were still pending.
On the stock market Wednesday, the raw material sector was hard hit by the COVID-19 concerns, with the steel industry suffering the heavy losses, dropping 2.16 percent.
China Steel Corp., the largest steel maker in Taiwan, fell 2.34 percent to close at NT$37.60, Tung Ho Steel Enterprise Corp. lost 2.86 percent to end at NT$40.75, and China Steel Structure Co. finished 3.60 percent lower at NT$69.60.
The textile sector also took a beating, falling 1.47 percent, with Far Eastern New Century Corp. dropping 1.18 percent to end at NT$29.25. Eclat Textile Co. lost 1.75 percent to close at NT$562.00, and Tung Ho Textile Co. ended down 2.01 percent at NT$14.60.
"The COVID-19 fears also took a toll on the tourism sector amid worry that private consumption would be affected," Huang said. The sector dropped 1.53 percent.
Restaurant chain operator Wowprime Corp. fell 2.22 percent to close at NT$132.00, and hotel chain owner Leofoo Development Co. lost 2.51 percent to end at NT$17.45.
Selling was also seen among large-cap tech stocks throughout the session, dealers said.
"TSMC, however, managed to recover from its earlier low, lending support to the broader market," Mega International Investment Services Corp. analyst Alex Huang said.
TSMC, the most heavily weighted stock on the local market, ended down 0.64 percent at NT$619.00, after coming off a low of NT$612.00. With the late-session buying in TSMC, the electronics index came off a low of 817.42 points to end 1.10 percent down at 823.38 points.
"TSMC remained fundamentally sound, so bargain hunters took the opportunity to buy into the stock when it fell below NT$615," Alex Huang said. "In addition, some investors probably wanted to give TSMC a boost to prevent the Taiex from falling further."
Among other semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, shed 3.52 percent to end at NT$65.80, while integrated circuit designer MediaTek Inc. rose 1.00 percent to close at NT$912.00.
Printed circuit board suppliers faced heavy pressure, led by Kinsus Interconnect Technology Corp., which plunged by the daily maximum 10 percent to end at NT$200.50, as investors rushed to lock in their gains from recent sessions.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. fell 0.92 percent to close at NT$107.50.
"After today's decline, more losses are possible on the Taiex, but it may find the nearest technical support at around 17,000 points," Kerry Huang said. "It depends on whether the domestic COVID-19 infections are brought under control."
According to the TWSE, foreign institutional investors sold a net NT$1.09 billion worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel