Taipei: Shares in Taiwan faced substantial declines for the second consecutive day, closing over 300 points lower on Tuesday. The downturn was driven by volatility in the United States, following U.S. President Donald Trump's criticism of Federal Reserve Chair Jerome Powell, which raised concerns about the independence of the American central bank.
According to Focus Taiwan, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), dropped by 312.77 points, or 1.64 percent, closing at 18,793.43. This followed a 1.49 percent decline on Monday. The index fluctuated between 18,793.43 and 19,059.65, with a turnover amounting to NT$243.16 billion (US$7.48 billion).
Concord Securities analyst Kerry Huang remarked on the sell-off in U.S. markets, citing a lack of investor confidence in the Trump administration, especially as the president threatens tariffs on Washington's trading partners. Trump's monetary policy remarks have cast doubts on the Fed's independence, which caused the Dow Jones Industrial Average to plummet by 2.48 percent overnight.
The electronics sector, particularly large cap semiconductor stocks, led the decline on the local main board. Huang noted investors' anxiety about potential tariffs on semiconductors, prompting them to reduce holdings in these stocks. TSMC (Taiwan Semiconductor Manufacturing Co.), the most heavily weighted local stock, fell 2.28 percent, closing at NT$816.00, and contributing over 150 points to the Taiex's downturn.
Other semiconductor stocks also experienced losses, with MediaTek Inc. dropping 3.35 percent to NT$1,300.00, and Alchip Technologies Inc. decreasing by 5.23 percent to NT$1,995.00. Conversely, United Microelectronics Corp. saw a rise of 1.49 percent to NT$44.30, ahead of its investor conference scheduled for Wednesday.
Huang further explained that the tech sector in Taiwan faces additional pressure from recent U.S. sanctions on chip exports to China, including Nvidia's H20 chips, affecting artificial intelligence-related stocks and further dragging down the Taiex.
Among the tech sector, Hon Hai Precision Industry Co., an iPhone assembler and AI server maker, declined by 3.30 percent to NT$132.00, while Quanta Computer Inc., another AI server supplier, fell by 3.66 percent to NT$223.50.
Despite the struggles of tech heavyweights, certain large cap old economy stocks showed resilience. Nan Ya Plastics Corp. rose by 1.33 percent to NT$30.45, and food brand Uni-President Enterprises Corp. increased by 0.94 percent to NT$75.40. Formosa Chemicals and Fibre Corp. slightly decreased by 0.20 percent to NT$24.55, and Standard Foods Corp. saw a marginal gain of 0.15 percent to NT$33.35.
The financial sector also faced a downturn, with Cathay Financial Holding Co. dropping 2.24 percent to NT$77.30, and Fubon Financial Holding Co. declining by 2.15 percent to NT$50.50. Mega Financial Holding Co. maintained its position, closing unchanged at NT$37.70.
Huang indicated that the Taiex remains in a consolidation phase, warning that any potential rebound might be followed by profit-taking amid the current fragile market sentiment. The TWSE reported that foreign institutional investors sold a net NT$5.24 billion worth of shares on the main board Tuesday.