Taiwan shares plunge on U.S. heavy losses

Taipei, Nov. 18 (CNA) Shares in Taiwan tumbled almost 700 points to close at the day's low Tuesday as sell-off was triggered by heavy losses on the U.S. markets overnight amid fears over the U.S. Federal Reserve's hawkish stance and stretched tech stocks, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 691.19 points, or 2.52 percent, at 26,756.12, off a high of 27,310.40. Turnover totaled NT$640.39 billion (US$20.51 billion).

"With many investors fearing a major technical pullback, the U.S. markets' plunges overnight further prompted them to trim their holdings today," Moore Securities Investment Consulting analyst Adam Lin said.

On Monday, the major U.S. indexes, such as the Nasdaq, fell below their critical technical support of the 50-day moving average. U.S. stock futures were also falling, pointing to an ugly opening on the spot markets Tuesday.

"In addition to technical reasons, local sentiment has also turned cautious, in particular after several Fed officials made hawkish comments about interest rates," Lin said. "Reduced hopes of a rate cut placed electronics heavyweights under pressure."

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the market, shed 2.77 percent to close at the day's low of NT$1,405.00, contributing about 320 points to the Taiex's fall.

iPhone assembler and AI server maker Hon Hai Precision Industry Co., second to TSMC in market value, dropped 2.54 percent to end the day's low of NT$230.00, while Quanta Computer Inc., another AI server supplier, also lost 2.17 percent to close at NT$270.00.

In addition, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., lost 2.82 percent to end at NT$2,070.00, but Yageo Corp., the world's third-largest multi-layer ceramic capacitor maker, bucked the downturn, rising 1.10 percent to close at NT$229.00.

"Judging from today's movement, I think many investors dumped their stocks in panic to stop losses, so selling was seen across the board, including nontech stocks," Lin said.

In the old economy sector, China Steel Corp., the largest steel maker in Taiwan, lost 1.11 percent to close at NT$17.75, and Tung Ho Steel Corp. shed 1.81 percent to end at NT$59.80. Meanwhile, King's Town Construction Co. lost 2.08 percent to close at NT$39.95, and Sakura Development Co. dropped 2.28 percent to end at NT$45.10.

In addition, Formosa Plastics Corp. shed 3.71 percent to close at NT$41.50, but Nan Ya Plastics Corp. ended up 1.42 percent at NT$57.30.

In the financial sector, Fubon Financial Holding Co. lost 2.51 percent to close at NT$89.50, and Cathay Financial Holding Co. ended down 0.77 percent at NT$64.80.

"The nearest technical support for the Taiex is near the 60-day moving average of 26,330 points," Lin said. "If the index fails to hold above that level, further losses will follow."

According to the TWSE, foreign institutional investors sold a net NT$48.54 billion worth of shares on the main board Tuesday.