Taiwan shares tumble over 500 points after U.S. heavy losses

Taipei, Jan. 13 (CNA) Shares in Taiwan took a beating, plunging more than 500 points Monday, with selling sparked by steep declines on U.S. markets at the end of last week amid rising worries over the Federal Reserve's next move, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 523.53 points, or 2.28 percent, at 22,488.33 after moving between 22,458.22 and 23,070.32. Turnover totaled NT$442.19 billion (US$13.35 billion).

The market opened up 0.25 percent at the day's high as contract chipmaker Taiwan Semiconductor Manufacturing Co.'s (TSMC) resilience helped the Taiex offset headwinds resulting from an almost 700 point plunge on the Dow Jones Industrial Average and a 1.63 percent decline on the tech-heavy Nasdaq index Friday after better-than-expected U.S. nonfarm payroll data, dealers said.

However, TSMC, the most heavily weighted stock on the local market, soon turned weaker and the sell-off accelerated in particular in the afternoon session, with weakness seen among other electronics heavyweights, dragging down the Taiex down to almost the day's low at the end of the session, dealers added.

"The strong jobs report in the United States prompted a spike in treasury yields as investors fear the Fed will slow down the pace of its rate cuts," Concord Securities analyst Kerry Huang said. "Higher interest rates made tech stocks at home and abroad less attractive. In Taiwan, the Taiex was led by the bellwether electronics sector to move lower."

The electronics index lost 2.86 percent with the semiconductor sub-index down 2.63 percent after TSMC, which initially rose to NT$1,115.00, fell 2.27 percent to close at NT$1,075.00. TSMC's losses represented about 200 points of the Taiex's fall.

Among other semiconductor firms, smartphone IC designer MediaTek Inc. fell 5.12 percent to end at NT$1,390.00 and application-specific integrated circuit (ASIC) designer Alchip Technologies, Ltd. shed 5.09 percent to close at NT$2,795.00.

Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co. lost 5.51 percent to end at NT$171.50, and power management solution provider Delta Electronics Inc. dropped 4.76 percent to close at NT$400.00.

Non-tech stocks moved lower in line with the broader market, with some exceptions in the petrochemical industry, which was boosted by higher international crude oil prices, after the U.S. Treasury Department announced sanctions against Russia's oil industry, dealers said.

Shares in Formosa Petrochemical Corp. rose 6.84 percent to end at NT$35.15, Formosa Plastics Corp. gained 2.86 percent to close at NT$32.35, and Nan Ya Plastics Corp. ended up 1.41 percent at NT$28.70.

Elsewhere in the old economy sector, China Steel Corp., the largest steel maker in Taiwan, lost 1.09 percent to close at NT$18.10, and Tung Ho Steel Corp. dropped 1.55 percent to end at NT$63.60. In addition, Fortune Electric Co. shed 4.16 percent to close at NT$484.00, and Shihlin Electric & Engineering Corp. ended down 1.40 percent at NT$176.50.

In the financial sector, which lost 0.68 percent, Cathay Financial Holding Co. shed 2.35 percent to close at NT$64.20, and E. Sun Financial Holding Co. fell 1.10 percent to end at NT$27.05. Fubon Financial Holding Co. appeared resilient, falling only 0.11 percent to close at NT$89.80, after reporting a new record high of NT$151.16 billion in net profit in 2024.

"It seemed many investors did not want to hold onto their stocks before the return of (Donald) Trump to the White House on Jan. 20," Huang said. "How he will carry out tariff hikes has created uncertainties in the global markets."

According to the TWSE, foreign institutional investors sold a net NT$55.60 billion worth of shares on the main board Monday, the 11th highest net sell in history.