Taipei, Feb. 17 (CNA) Shares in Taiwan fell nearly half a percent Monday amid escalating fears over the spread of the novel coronavirus (Covid-19) after Taiwan reported the first death caused by the virus on Sunday, dealers said.
Selling focused on the bellwether electronics sector, with investors rushing to dump large cap stocks throughout the session, while select old economy and financial stocks appeared resilient, providing some support to the broader market, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended down 52.19 points, or 0.44 percent, at 11,763.51, after moving between 11,724.82 and 11,775.56. Turnover was NT$112.11 billion (US$3.74 billion).
The market opened down 0.38 percent as sentiment was dampened by news of the first death caused by the virus in Taiwan, and downward pressure continued because of the weakness of large tech stocks, including Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.
With the Taiex falling below the nearest technical support at around the 5-day moving average of 11,761, some investors shifted to the buy side to help the broader market rebound slightly by the end of the session, they said.
"Investors' mood remained dictated by the epidemic's development," Hua Nan Securities analyst Kevin Su said. "After the first death was reported in Taiwan, market sentiment turned very cautious today."
At a news conference, Health and Welfare Minister Chen Shih-chung (陳時中), who heads the Central Epidemic Command Center (CECC), said a 61-year-old male living in central Taiwan died of the coronavirus, which originated in Wuhan, China.
Because the man, who had hepatitis B and diabetes, had not traveled overseas recently, and local health authorities were still unsure how the man became infected, his case raised concerns of a community spread, dealers said.
"So the first thing many investors did was to cut their holdings amid fears of a possible worsening situation," Su said. "Large cap stocks, in particular in the tech sector, fell victim to such fears as investors were worried about the virus' economic impact."
In the electronics sector, TSMC lost 1.04 percent to close at NT$331.50. Its losses alone contributed to a roughly 30-point decline in the Taiex and a 0.73 percent fall in electronics shares.
The selling in TSMC spread to other semiconductor stocks, Su said.
Integrated circuit designer MediaTek Inc. lost 1.85 percent to close at NT$398.00 amid worries over weakening demand for 5G smartphones in China, and IC packaging and testing services provider ASE Technology Holding Co. closed 0.90 percent lower at NT$76.70.
Bucking the downturn, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 0.52 percent to close at NT$4,845.00. But Su said the gains were technical in nature because the coronavirus could limit consumer spending and hurt Largan's sales.
Su said the food sector outperformed the broader market Monday on expectations that suppliers of daily necessities will not be hit as hard by coronavirus fears, leading investors to see them as safe havens.
In the food sector, which rose 0.73 percent, Uni-President Enterprises Corp. rose 1.08 percent to close at NT$75.00, and rival Wei Chuan Foods Corp. gained 5.05 percent to end at NT$22.90.
The financial sector benefited from bargain hunting to fall only 0.01 percent as investors took advantage of the sector's relatively low valuations, Su said.
Mega Financial Holding Co. rose 0.62 percent to close at NT$32.50 and CTBC Financial Holding Co. added 0.66 percent to end at NT$22.95, while Cathay Financial Holding Co. lost 0.60 percent to close at NT$41.40.
"If the Taiex stages a technical rebound, the room for gains will be limited because the market is expected to see high technical hurdles ahead of 11,800 points," Su said.
According to the TWSE, foreign institutional investors sold a net NT$4.21 billion in shares on the market Monday.