Taipei, Feb. 28 (CNA) Taiwan's stock market, which was off Friday for a public holiday, lost more than NT$1 trillion in market capitalization this week over novel coronavirus fears, and it could be more of the same next week, analysts warned.
The benchmark weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, fell by 3.37 percent, or 394.18 points, in just four trading sessions to close at 11,292.17 Thursday after the Dow Jones Industrial Average fell by 2,000 points between Monday and Wednesday.
Due to the fall in the Taiex, market cap was down about NT$1.19 trillion from last Friday to NT$34.30 trillion, according to data compiled by the TWSE.
The Dow fell another 1,200 points on Thursday, the steepest single session fall in the index's history, amid escalating concerns over the spread of the virus in Asia, Europe and the Middle East, and analysts believe the Taiex could see a further downturn when trading resumes Monday.
Liao Che-hung (廖哲宏), a manager at Allianz Global Investors Taiwan Technology Fund, said there were no signs the Dow will stabilize anytime soon amid the coronavirus scare, meaning the Taiex will likely see more volatility next week.
The losses on the Dow could propel investors in Taiwan to dump more of their holdings, Liao said, but he cautioned that how foreign institutional investors react will be a critical factor in what other investors decide to do.
Analysts said the heavy selling in Taiwan this week largely came from foreign institutional investors.
They sold a net NT$94.44 billion in shares, punishing large cap stocks across the board over fears the escalating epidemic could hurt production as well as consumption.
Among the falling large cap tech stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) lost 2.77 percent this week to close at NT$316.00 Thursday and iPhone assembler Hon Hai Precision Industry Co. fell 1.71 percent to close at NT$80.30.
Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., fell 3.90 percent to close at NT$4,610.00.
Among old economy stocks, which also suffered heavy losses, Formosa Petrochemical Corp. shed 3.26 percent this week to close at NT$86.10 Thursday, and Formosa Plastics Corp. plunged 3.81 percent to end at NT$91.00.
Analysts said the Taiex is likely to test the technical support at the 240-day moving average of 11,054 points soon, and they suggested that investors keep as much cash as possible at this time before buying opportunities emerge.
To date, there have been more than 83,000 confirmed cases worldwide, leaving at least 2,800 people dead, most of them in China.