Taiwan shares end below 40,000 after wild 1,700-point swing

Taipei, July 30 (CNA) Taiwan shares closed below the 40,000-point threshold on Thursday after a volatile session that saw the benchmark index swing more than 1,700 points, erasing an intraday surge of over 1,100 points as late selling dragged the market lower.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 105.88 points, or 0.26 percent, at 39,933.30 on turnover of NT$1.10 trillion (US$34.08 billion).

The extreme volatility followed a brutal two-day plunge that wiped out 3,595.01 points earlier in the week.

The benchmark index fell more than 600 points in early trading to 39,404, near its 120-day moving average of around 39,327, before rebounding sharply to an intraday high of 41,155, up 1,116 points from the previous close.

Late selling, however, pushed the index back into negative territory and below the 40,000-point threshold.

Among the market's heavyweight stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co., which accounts for more than 40 percent of the local market's capitalization, rose NT$5, or 0.23 percent, to close at NT$2,205.

Smartphone IC designer MediaTek Inc. gained NT$85, or 2.70 percent, to NT$3,235, while Delta Electronics Inc. advanced NT$35, or 2.34 percent, to NT$1,530.

High-priced technology stocks also outperformed. Aspeed Technology Inc., the market's most expensive stock, rose NT$295, or 2.29 percent, to NT$13,205, helping lift other high-priced shares. eMemory Technology Inc. hit its daily limit-up, closing at NT$2,290, while Elite Material Co. and Global Unichip Corp. both gained more than 5 percent.

United Microelectronics Corp., which issued an upbeat business outlook at an investor conference Wednesday, briefly hit the daily limit during the session before closing up NT$7.5, or 7.32 percent, at NT$110, outperforming the broader market.

Chen Yi-kuang (陳奕光), chairman of Fubon Securities Investment Services Co., said the correction has been unusually steep, with the Taiex down more than 6,192 points so far this month and on track for its biggest monthly point decline on record.

He also noted that combined margin balances on Taiwan's stock market fell by a record NT$52.1 billion in a single day on Wednesday, indicating much of the leveraged selling pressure had likely been flushed out.

Still, Chen said a rapid V-shaped recovery was unlikely after the Taiex tumbled nearly 9,000 points from its record high of 48,218 at the end of June to Wednesday's intraday low of 39,384. Instead, he expects the market to remain volatile in the near term as it gradually forms a bottom.

According to the Taiwan Stock Exchange, foreign institutional investors were net sellers of NT$48.31 billion of shares on the main board Thursday.