Taiwan shares plunge after U.S. tech losses

Taipei, July 26 (CNA) Shares in Taiwan moved sharply lower Friday morning after tech stocks suffered heavy losses on markets in the United States in recent days while Taiwan's markets were closed due to a typhoon, dealers said.

As of 10:20 a.m., the Taiex, the Taiwan Stock Exchange's benchmark weighted index, had shed 776.21 points, or 3.39 percent, to 22,095.63 on turnover of NT$256.13 billion (US$7.81 billion).

Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, was down 5.11 percent at NT$929.00.

Its losses contributed about 400 points alone to the Taiex's decline and sent the electronics index and semiconductor sub-index lower by 4.15 percent and 4.81 percent, respectively.

The market opened down 664.91 points, or 2.91 percent, as TSMC came under heavy downward pressure after its American depositary receipts fell 3.7 percent and 5.9 percent, respectively, on Tuesday and Wednesday, ahead of a mild rebound of 0.3 percent Thursday.

Selling on the broader market pushed down the Taiex by 982.23 points, or 4.29 percent, to a low of 21,889.61 at around 9:05 a.m. before recovering slightly.

On Thursday, the tech-heavy Nasdaq index lost 0.93 percent after a 3.64 percent plunge on Wednesday.

"Investors here simply seized on the heavy losses on U.S. markets along with a decline of TSMC's ADRs as an excuse to lock in recent gains in local tech stocks this morning," MasterLink Securities analyst Tom Tang said.

"As long as TSMC moved lower, there was no reason for the Taiex to escape the volatility," Tang said.

Tang said tech stocks at home and abroad appeared jittery amid fears that if former U.S. President Donald Trump wins the presidential election in November, tech tensions between the United States and China will escalate.

"In addition to TSMC, other tech heavyweights also suffered this morning, adding downward pressure to the broader market," Tang said.

Among them, IC packaging and testing services provider ASE Technology Holding Co. had plunged 10 percent, the maximum daily decline, to NT$155.50 and smartphone IC designer MediaTek Inc. had fallen 4.71 percent to NT$1,215.00 as of 10:20 a.m.

In addition, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, had also shed 4.71 percent to NT$192.00.

"It seemed that TSMC saw some technical support around NT$910, the 60-day moving average, due to its sound fundamentals," Tang said.

Tang said TSMC is forecast to post NT$41.63 in earnings per share in 2024.

"Even if the stock falls to NT$900.00, the stock is trading at a price to earnings multiple of around 21, and the relatively low valuation is expected to attract many bargain hunters."

"Whether the Taiex stabilizes will depend on how TSMC goes. But I'm upbeat about TSMC's business outlook as well as the stock's direction," Tang said.

Tang said U.S. markets were rebounding slightly in after-hours trading, pointing to a rise when they open later Friday, which could lend support to the Taiex.