Taipei: Shares in Taiwan experienced substantial downturns for the third consecutive trading day, plummeting over 1,000 points on Wednesday. This came after U.S. President Donald Trump imposed an additional 50 percent tariff on Chinese goods, escalating the accumulated levy to 104 percent.
According to Focus Taiwan, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), closed with a decline of 1,068.19 points, or 5.79 percent, settling at 17,391.76. The index fluctuated between 17,306.97 and 18,371.52 throughout the session, with a total turnover reaching NT$566.61 billion (US$17.14 billion).
Despite intervention by the NT$500 billion National Financial Stabilization Fund, established in 2000 to mitigate unexpected external disruptions to the local bourse, the day's drop was the third steepest in history. This decline follows Monday's record fall of 2,065.87 points and a previous significant drop on August 5, 2024, of 1,807.21 points.
MasterLink Securities analyst Tom Tang noted, "The expanded turnover indicates that the main board was heavily impacted by panic selling, with investors taken aback by Trump's announcement, especially as China shows no signs of conceding." He emphasized the potential global economic repercussions of the ongoing tariff war between the world's two largest economies.
Tang highlighted that while the stabilization fund was active, the selling pressure was overwhelming. "It seems the stabilization fund and other government-led initiatives attempted to bolster market heavyweights like TSMC to prevent a deeper decline," Tang added.
TSMC, Taiwan Semiconductor Manufacturing Co., the most significant stock on the exchange, saw a 3.80 percent drop, closing at NT$785.00, the first dip below NT$800 since May 9, 2024. Tang remarked, "TSMC shares appear undervalued now, but tariff-related concerns continue to linger, making it difficult to forecast a bottom."
Government-led funds also invested in semiconductor stocks such as MediaTek Inc., which fell 5.95 percent to NT$1,185.00. Conversely, Nanya Technology Corp. and others in the IC packaging and testing services sector hit the maximum daily decline, closing at NT$30.20 and NT$115.00, respectively.
Hon Hai Precision Industry Co., another major player, plunged 10 percent to NT$112.50, marking the third consecutive session of maximum decline. Tang explained, "With Hon Hai's extensive production base in China, investors are apprehensive about the company's vulnerability to the escalating tariff war."
In the non-tech sector, select stocks received some support from government-led funds. Uni-President Enterprises Corp. decreased by 4.21 percent to NT$75.00, while China Steel Corp. shed 7.09 percent, ending at NT$19.00. Formosa Plastics Corp. and Nan Ya Plastics Corp. also reported losses of 9.70 percent and 6.93 percent, respectively.
Financial sector stocks experienced a 5.61 percent decline. CTBC Financial Holding Co. fell 5.16 percent to NT$34.00, Mega Financial Holding Co. dropped 3.66 percent to NT$36.85, Fubon Financial Holding Co. slid 7.45 percent to NT$72.10, and Cathay Financial Holding Co. decreased by 8.50 percent to NT$49.50.
Tang warned, "The recent steep declines have prompted margin calls, leading to further selling. The market remains unstable, so caution is advised."
According to TWSE, foreign institutional investors offloaded a net NT$35.78 billion worth of shares on the main board.