Another bloodbath for Taiwan shares as U.S.-China tariff war escalates

Taipei, April 9 (CNA) Shares in Taiwan incurred heavy losses for the third consecutive trading session, falling more than 1,000 points Wednesday, after U.S. Donald Trump slapped an additional 50 percent tariff on goods from China to bring up the accumulated levy to 104 percent, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), closed down 1,068.19 points, or 5.79 percent, at 17391.76 after moving between 17306.97 and 18,371.52. Turnover totaled NT$566.61 billion (US$17.14 billion).

Although the NT$500 billion National Financial Stabilization Fund, set up by the government in 2000 to serve as a buffer against unexpected external factors that might disrupt the local bourse, started its intervention Wednesday, the day's decline was still the third steepest in history, trailing only Monday's 2,065.87 points and Aug. 5, 2024's 1,807.21 points.

"Look at the expanded turnover, I think the main board was hit hard by panicked selling as investors were shocked by Trump's announcement overnight with China showing no signs of backing down," MasterLink Securities analyst Tom Tang said.

"They are the top two economies in the world so investors just feared their tariff war will batter the global economy and cause tremendous financial losses," Tang said.

National Financial Stabilization Fund

Tang said the presence of the stabilization fund failed to stem the bleeding much as the selling pressure was very significant.

"But, I suspect the stabilization fund and other government-led funds rushed to pick up market heavyweights, including TSMC (Taiwan Semiconductor Manufacturing Co.) to prevent the index from falling even further," Tang said.

TSMC, the most heavily weighted stock here, fell 3.80 percent to close at NT$785.00. It was the first time the stock finished below the NT$800 mark since May 9, 2024, when it closed at NT$796.00.

"TSMC shares are cheap now but the stock remains haunted by tariff worries and it is hard to predict when it will bottom out," Tang said.

Tang said government-led funds also picked up semiconductor stocks including smartphone IC designer MediaTek Inc., which lost 5.95 percent to end at NT$1,185.00. However, memory chip supplier Nanya Technology Corp. and IC packaging and testing services provider shed 10 percent, the maximum daily decline, to close at NT$30.20 and NT$115.00, respectively.

iPhone assembler and artificial intelligence maker Hon Hai Precision Industry Co., second to TSMC in terms of market value, plunged 10 percent to end at NT$112.50, marking the third consecutive session of the maximum decline.

"Hon Hai has a broad production base in China so many investors fear the company will be hit hard by the escalating tariff war," Tang said.

Non-tech stocks

Tang said select non-tech stocks also benefited from support from government-led funds throughout the session or they would have reported heavier losses.

Among them, food brand Uni-President Enterprises Corp. lost 4.21 percent to close at NT$75.00, and China Steel Corp., the largest steel maker in Taiwan, shed 7.09 percent to end at NT$19.00.

Elsewhere in the old economy sector, Formosa Plastics Corp. fell 9.70 percent to close at NT$31.65, and Nan Ya Plastics Corp. dropped 6.93 percent to end at NT$26.85.

In the financial sector, which fell 5.61 percent, CTBC Financial Holding Co. lost 5.16 percent to close at NT$34.00, and Mega Financial Holding Co. ended down 3.66 percent at NT$36.85. In addition, Fubon Financial Holding Co. slid 7.45 percent to close at NT$72.10, and Cathay Financial Holding Co. shed 8.50 percent to end at NT$49.50.

"Due to the steep decline in recent sessions, many investors have faced margin calls (to add money to their margin accounts) to trigger more selling," Tang said. "I think the market is far from stable so stay cautious."

According to the TWSE, foreign institutional investors sold a net NT$35.78 billion worth of shares on the main board.