Taiex plunges amid U.S. tech losses over Fed Chair nominee

Taipei, Feb. 2 (CNA) Shares in Taiwan moved sharply lower Monday with selling sparked by heavy tech losses in the United States at the end of last week amid concerns that Federal Reserve Chair nominee Kevin Warsh could adopt a more hawkish monetary stance, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 439.72 points, or 1.37 percent, at 31,624.03 after fluctuating between 31,359.95 and 32,008.46. Turnover totaled NT$740.40 billion (US$23.39 billion).

"The nomination of Warsh has raised fears that the Fed will downsize its balance sheet by withdrawing funds from the market, which caused not only the stock markets but also gold and silver prices to plunge," MasterLink Securities analyst Tom Tang said.

"Many major local market players simply seized the U.S. tech losses as a cause to pocket their recent significant gains ahead of the Lunar New Year holiday," Tang said, citing a 0.94 percent fall on the tech-heavy Nasdaq index and a 3.87 percent decline on the Philadelphia Semiconductor Index.

Smartphone IC designer MediaTek Inc. slid 3.12 percent to close at NT$1,705.00, and memory chip suppliers Nanya Technology Corp. and Winbond Electronics Corp. tumbled 10 percent, the maximum daily amount, to end at NT$294.00 and NT$116.00, respectively.

"Fortunately, TSMC (Taiwan Semiconductor Manufacturing Co.) benefited from late session bargain hunting to recoup part of the Taiex's losses," Tang said.

TSMC, which accounts for more than 40 percent of market value, dropped 0.56 percent to close at NT$1,765.00, off a low of NT$1,745.00.

Also in the tech sector, AI server maker and iPhone assembler Hon Hai Precision Industry Co. lost 2.72 percent to close at NT$214.50, while cooling solutions provider Asia Vital Components Co. bucked the downturn, rising 2.05 percent to end at NT$1,490.00.

In the old economy sector, Formosa Plastics Corp. lost 6.34 percent to close at NT$44.30, and Nan Ya Plastics Corp. fell 6.98 percent to end at NT$70.60. Shihlin Electric & Engineering Corp. shed 5.68 percent to close at 216.00, and Fortune Electric Co. slid 2.89 percent to end at NT$942.00.

However, shares in China Steel Corp., the largest steel maker in Taiwan, rose 1.69 percent to close at NT$21.10 after turning a profit in December, and Chun Yuan Steel Industry Co. added 1.62 percent to end at NT$21.90.

In the financial sector, which lost 0.77 percent, Fubon Financial Holding Co. dropped 0.44 percent to close at NT$90.50, and Cathay Financial Holding Co. ended down 1.46 percent at NT$74.50.

"Judging from today's movement, the Taiex seemed to have technical support ahead of the 20-day moving average of 31,300 points for now," Tang said.

According to the TWSE, foreign institutional investors sold a net NT$48.12 billion of shares on the main board Monday.