Taiwan shares end sharply down on oil price spike, Fed comments

Taipei, March 19 (CNA) Shares in Taiwan closed lower by over 650 points Thursday, with the sell-off sparked by a spike in crude oil prices amid Middle East tensions and the U.S. Federal Reserve's alert over rising inflation, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 658.90 points, or 1.92 percent, at 33,689.68, after moving between 33,663.78 and 34,279.12. Turnover totaled NT$845.71 billion (US$24.49 billion).

"Rising crude oil prices spooked market sentiment as the war in the Middle East shows no sign of ending soon," Meta International Investment Services analyst Alex Huang said.

Overnight, Brent prices, the global benchmark, rose almost 4 percent to top US$107 per barrel on escalating threats by Israel and Iran to attack oil facilities in the Middle East.

"Fed Chair (Jerome) Powell's comments on growing inflation dealt another blow to investors' mood," Huang said. While the Fed left interest rates unchanged Wednesday, Powell's cautionary comments about the economy came amid inflationary pressure.

Large tech stocks fell victim to such fragile sentiment, pushing the Taiex below the technical support of the five-day moving average around 33,729 points, Huang said.

After its American depositary receipts fell 1.85 percent overnight, contract chipmaker Taiwan Semiconductor Manufacturing Co., which accounts for over 40 percent of total market value, lost 2.89 percent to close at NT$1,850.00, contributing about 440 points to the Taiex's fall, which sent the electronics index down 2.02 percent.

Smartphone IC designer MediaTek Inc. slid 2.89 percent to end at NT$1,680.00, and memory chip supplier Nanya Technology Corp. shed 5.80 percent to close at NT$260.00. However, shares in TSMC's IC design subsidiary Global Unichip Corp. bucked the downturn, rising 3.78 percent to end at NT$2,610.00.

Elsewhere in the tech sector, AI server maker and iPhone assembler Hon Hai Precision Industry Co. lost 2.38 percent to close at NT$205.00, and power management solution provider Delta Electronics Inc. ended down 0.68 percent at NT$1,455.00.

"Selling was seen across the board on expectations that high oil prices will affect the economy and such unfavorable factors could result in systemic risks," Huang said.

In the old economy sector, Eclat Textile Co. shed 4.97 percent to close at NT$372.50 and rival Makalot Industrial Co. dropped 1.35 percent to end at NT$293.00. In addition, Nan Ya Plastics Corp. fell in line with its subsidiary Nanya Technology, down 2.32 percent to close at NT$84.20, but Formosa Plastics Corp. gained 2.75 percent to end at NT$48.60.

With the financial sector down 1.57 percent, Cathay Financial Holding Co. lost 2.45 percent to close at NT$71.60, and Fubon Financial Holding Co. fell 1.45 percent to end at NT$88.20.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$90.95 billion of shares on the main board Thursday.