Taiwan shares tumble amid Fed concerns, heavy U.S. losses

Taipei, Nov. 14 (CNA) Shares in Taiwan shed more than 500 points Friday as a sell-off was sparked by a plunge on U.S. markets overnight amid renewed worries that the U.S. Federal Reserve has turned hawkish toward its rate-cut cycle, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 506.06 points, or 1.81 percent, at 27,397.50 after moving between 27,383.34 and 27,816.45. Turnover totaled NT$588.13 billion (US$18.89 billion)

"The steep losses in the United States just prompted investors here to pocket their recent significant gains," equity market analyst Andy Hsu said, referring to a 1.65 percent fall on the Dow Jones Industrial Average and a 2.29 percent drop on the tech-heavy Nasdaq index overnight after several Fed officials made hawkish comments on rate cuts.

"Amid renewed caution toward rate cuts, investors rushed to punish tech stocks on the local main board, taking cues from the heavy losses suffered by artificial intelligence stocks such as Nvidia Corp. on stretched tech stocks," Hsu said.

After a 2.90 percent fall in its American depositary receipts (ADR) overnight, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock here, lost 2.05 percent to close at NT$1,430.00, contributing about 240 points to the Taiex's fall and sending the electronics index down 2.21 percent.

Among other semiconductor heavyweights, smartphone IC designer MediaTek Inc. lost 1.20 percent to end at NT$1,230.00, memory chip supplier Nanya Technology Corp. shed 3.06 percent to close at NT$158.50, and IC packaging and testing services provider ASE Technology Holding Co. fell 3.89 percent to end at NT$222.50.

Other AI-related hardware stocks also suffered, with AI server maker and iPhone assembler Hon Hai Precision Industry Co., second to TSMC in market value, falling 4.37 percent to close at NT$241.00, and Quanta Computer Inc., another AI server supplier, shedding 1.93 percent to end at NT$279.50.

"Some investors parked their money in select nontech stocks, but as the electronics sector faltered, it was unlikely for the Taiex to go in the other direction," Lin said.

Bolstered by rotational buying, food brand Uni-President Enterprises Corp. gained 0.53 percent to close at NT$75.20, and chicken supplier Charoen Pokphand Enterprise (Taiwan) Co. rose 1.85 percent to end at NT$137.50.

In addition, Eclat Textile Co. gained 1.94 percent to close at NT$446.50, and rival Makalot Industrial Co. rose 4.24 percent to end at NT$307.50.

In the financial sector, which dropped 0.35 percent, Cathay Financial Holding Co. added 0.15 percent to close at NT$66.00, while Fubon Financial Holding Co. ended down 0.74 percent at NT$93.30.

"Judging from today's tech performance, I think foreign institutional investors stood on the sell side," Hsu said. "With the Taiex falling below the 20-day moving average of 27,867 points, further losses could follow."

According to the TWSE, foreign institutional investors sold a net NT$60.40 billion worth of shares on the main board Friday.