Taiwan shares sharply lower amid deeper concerns over U.S. tariff policies

Taipei, June 2 (CNA) Shares in Taiwan moved sharply lower, down more than 340 points Monday as concerns over the United States' tariff policies escalated after President Donald Trump accused China of violating a preliminary trade deal with Washington, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 344.59 points, or 1.61 percent, at 21,002.71, after moving between 20,940.98 and 21,256.10. Turnover totaled NT$344.76 billion (US$11.50 billion).

The market opened down 0.44 percent and selling increased, focusing on the bellwether electronics sector, in particular large-cap semiconductor stocks, pushing the index below the technical support of the 20-day moving average around 22,815 points, and weakness continued until the end of the session with market sentiment spooked by Trump's accusation.

Over the weekend, Trump said China has reneged on a deal that paused retaliatory tariffs between Beijing and Washington, suggesting he will take action in response.

"Global markets remained focused on the tariff issue," Cathay Futures Consultant analyst Tsai Ming-han said. "Now, Trump's comments raised concerns over trade frictions between the top two economies."

"In Taiwan, investors also stayed alert over a possible tariff on semiconductors, and that's why chip stocks came under heavier pressure throughout the session," Tsai said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted local stock, fell 2.17 percent to close at the day's low of NT$946.00. The stock's losses contributed about 170 points to the Taiex's fall and sent the electronics index lower by 1.94 percent.

Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, shed 6.01 percent to end at NT$1,095.00, and IC packaging and testing services provider ASE Technology Holding Co. dropped 2.54 percent to close at NT$134.50. Smartphone IC designer MediaTek Inc. appeared more resilient, ending unchanged at NT$1,260.00.

Also in the electronics sector, iPhone assembler and artificial intelligence server maker Hon Hai Precision Industry Co. lost 2.24 percent to close at NT$152.50, and Quanta Computer Inc., another AI server supplier, dropped 0.18 percent to end at NT$271.00.

"While the tech sector was in the doldrums, investors tended to park their money in select non-tech stocks. Today, the financial sector was highlighted," Tsai said, adding he did not rule out the possibility that the buying came from government-led funds.

In the financial sector, which rose 0.30 percent, Fubon Financial Holding Co. rose 2.76 percent to close at NT$81.80 and Cathay Financial Holding Co. gained 1.00 percent to end at NT$60.40.

With the number of COVID-19 infections on the rise, Tsai said some biotech stocks attracted buying. Among them, testing kit supplier Panion & BF Biotech Inc. rose 2.20 percent to close at NT$83.60, and surgical mask brand Universal Inc. added 3.90 percent to end at NT$41.25.

Elsewhere in the old economy sector, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 1.02 percent to close at NT$247.00, and rival Wan Hai Lines Ltd. ended up 1.85 percent at NT$110.00. However, Formosa Plastics Corp. lost 4.32 percent to close at NT$33.20, and Nan Ya Plastics Corp. ended down 4.01 percent to end at NT$27.50.

"The Taiex fell below the 20-day moving average today, meaning the local main board has became technically weaker," Tsai said. "As long as the tariff issue remains in place, investors should stay cautious."

According to the Taiex, foreign institutional investors sold a net NT$53.87 billion worth of shares on the main board Monday.