Taiwan shares end sharply lower after Trump's tariff threat

Taipei, Nov. 26 (CNA) Shares in Taiwan fell sharply Tuesday, dropping nearly 270 points in the wake of U.S. President-elect Donald Trump's threat to impose steep tariffs on goods made in Canada, Mexico and China.

Dealers said the downturn was led by the bellwether electronics sector, much of which has a presence in the countries targeted by Trump's tariffs.

The Taiex, the Taiwan Stock Exchange's (TWSE) weighted index, ended down 269.61 points, or 1.17 percent, at 22,678.76 after fluctuating between 22,645.13 and 22,832.11. Turnover totaled NT$309.26 billion (US$9.52 billion).

The market opened down 0.69 percent and selling continued to push down the Taiex to the day's low by about 300 points in the early morning session.

Although the Taiex returned to the 22,700 point mark at one point, selling increased again in the last few minutes of the session as investors trimmed their holdings in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co., the two largest companies on the main board by market value.

Much of the downward pressure came from Trump's threat to impose a blanket 25 percent tariff on Mexican and Canadian goods and an additional 10 percent levy on Chinese products, said Alex Huang, an analyst with Mega International Investment Services Corp.

"Hon Hai [the second largest firm on the Taiex] has already built a sprawling production base in Mexico and has declared its intention to build the world's largest artificial intelligence server plant there."

Hon Hai, known as Foxconn globally, lost 3.80 percent to close at NT$202.50, with other AI-related stocks with large investments in Mexico also taking a hit.

Wistron Corp. shed 3.61 percent to end at NT$120.00, with its cloud-enabled services subsidiary Wiwynn Corp. losing 3.86 percent to close at NT$2,115.00. Quanta Computer Inc., another AI server supplier, ended down 0.67 percent at NT$297.00.

Meanwhile, Huang said fears Taiwan's large trade surplus with Washington could put it next in Trump's crosshairs led to losses for TSMC, whose American depositary receipts lost 2.63 percent on the U.S. markets overnight.

TSMC, the local market's most heavily weighted stock, shed 1.94 percent to close at the day's low of NT$1,010.00, contributing about 160 points to the Taiex's fall.

However, other major semiconductor stocks stayed resilient with smartphone IC designer MediaTek Inc. unchanged at NT$1,280.00, and United Microelectronics Corp., a smaller contract chipmaker, rising 1.11 percent to end at NT$45.40.

Bucking the downturn seen across much of the market, the auto industry rose 0.56 percent, with China Motor Corp., which produces cars under the Mitsubishi brand in Taiwan, gaining 4.49 percent to close at NT$90.80, and auto part supplier Hota Industrial Manufacturing Co. soaring 10 percent, the maximum daily increase, to end at NT$66.40.

In the financial sector, which lost 0.18 percent, Cathay Financial Holding Co. added 0.15 percent to close at NT$67.40, while Fubon Financial Holding Co. ended down 0.44 percent at NT$90.10.

According to the TWSE, foreign institutional investors sold a net NT$29.25 billion worth of shares on the main board Tuesday.