Taiwan shares end sharply down amid worries over U.S. volatility

Taipei, May 19 (CNA) Shares in Taiwan moved sharply lower by more than 300 points Monday amid fears over volatility on the U.S. markets after Moody's stripped the top credit ratings of Washington over the weekend, citing the federal government's growing budget deficit, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 319.86 points, or 1.46 percent, at 21,523.83 after fluctuating between 21,496.69 and 21,786.33. Turnover totaled NT$326.26 billion (US$10.79 billion).

"Investors rushed to dump their holdings on the local main board as they fear stocks in the United States will suffer after Moody's downgrade," Hua Nan Securities analyst Kevin Su said.

"The credit ratings cut led to a spike in benchmark U.S. 10-year treasury yields, which has made tech stocks less attractive, so it was no surprise that selling today focused on the bellwether electronics sector," Su said.

The electronics index lost 1.73 percent after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock here, shed 1.40 percent to close at NT$984.00, contributing more than 100 points to the Taiex's drop.

TSMC's selling spread to other semiconductor stocks, with smartphone IC designer MediaTek Inc. down 4.03 percent to end at NT$1,310.00 and IC packaging and testing services provider ASE Technology Holding Co. down 3.40 percent to close at NT$142.00. In addition, memory chip supplier Nanya Technology Corp. lost 3.72 percent to end at NT$43.95.

"The Taiex's losses were largely driven by fears over the U.S. market outlook as investors simply left behind the positive leads expected from the 2025 Computex," Su said. "But I prefer to say the artificial intelligence business is still booming."

iPhone assembler and AI server maker Hon Hai Precision Industry Co. lost 2.53 percent to close at NT$154.00, and Quanta Computer Inc., another AI server maker, fell 3.27 percent to end at NT$266.00. AI PC brand Asustek Computer Inc. shed 2.05 percent to close at NT$621.00, but Compal Electronics Inc., which also rolls out AI servers, gained 4.86 percent to end at NT$29.15.

Su said while many nontech stocks moved in weakness, select ones in particular in the biotech industry outperformed the broader market with the number of COVID-19 infections on the rise.

Among them, test kit provider Panion & BF Biotech Inc. rose 5.80 percent to close at NT$76.60, and vaccine developer Adimmune Corp. gained 4.86 percent to end at NT$19.40.

Renewable energy stocks also stayed resilient due to the government's efforts to push for green energy as part of its nuclear-free homeland policy, Su said.

Luxe Green Energy Technology Co. rose 0.35 percent to close at NT$28.50, and Allis Electric Co. ended up 0.92 percent at NT$110.00.

While the financial sector lost 1.13 percent, Mega Financial Holding Co. rose 0.86 percent to close at NT$41.20, and Shanghai Commercial and Savings Bank added 1.94 percent to end at NT$47.35.

"After today's losses, consolidation on the main board is expected to continue, while the nearest technology support will not be seen until the index moves closer to 20,885 points, the intraday high on May 5," Su said.

According to the TWSE, foreign institutional investors sold a net NT$13.05 billion worth of shares on the main board Monday.