Taiex plunges as crude oil prices spike amid Middle East concerns

Taipei, Sept. 2 (CNA) Shares in Taiwan fell sharply Wednesday as a spike in international crude oil prices amid renewed United States attacks on Iran heightened fears of inflationary pressures, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 784.00 points, or 1.67 percent, at the day's low of 46,164.72. Turnover totaled NT$918.39 billion (US$28.95 billion), down from Tuesday's NT$1.19 trillion.

"Crude oil prices rose after the latest U.S. strike against Iran, sending U.S. Treasury yields higher and raising fears the Federal Reserve will increase interest rates to curb inflation," Mega International Investment Services analyst Alex Huang said.

"Interest-rate-sensitive tech stocks fell victim to rate hike concerns today, led by TSMC (Taiwan Semiconductor Manufacturing Co.)," Huang said. "The reduced turnover showed that many investors took to the sidelines, waiting for more clues about the Fed's next move."

The bellwether electronics index fell 2.06 percent after contract chipmaker TSMC, which accounts for over 40 percent of total market value, shed 2.25 percent to close at NT$2,385.00, contributing about 440 points to the Taiex's fall.

IC packaging and testing firm ASE Technology Holding Co. slid 3.44 percent to end at NT$589.00, while memory chip supplier Winbond Electronics Corp. bucked the downturn on a global supply shortage, ending up 1.70 percent at NT$179.00.

Smartphone IC designer MediaTek Inc. also appeared resilient, falling only 0.93 percent to close at NT$4,275.00 after a 10 percent surge Tuesday on Nvidia Corp.'s plan to invest US$3.5 billion in the company.

Outside the semiconductor industry, iPhone assembler and AI server maker Hon Hai Precision Industry Co. lost 1.95 percent to close at NT$251.00, and power management solution provider Delta Electronics Inc. ended down 7.24 percent at NT$1,730.00.

With the tech sector facing a sell-off, buying rotated to select old economy stocks as safe havens, dealers said.

Due to higher crude prices, Formosa Petrochemical Corp. rose 2.61 percent to close at NT$78.70, while Nan Ya Plastics Corp. ended up 1.28 percent at NT$217.50 on its efforts to produce materials for use in tech gadgets.

Food brand Uni-President Enterprises Corp. rose 0.52 percent to close at NT$76.60, and Wei Chuan Foods Corp. ended up 0.41 percent at NT$12.25 on hopes of higher sales triggered by the summer heat.

The financial sector also outperformed the broader market, rising 0.45 percent, "as many stocks have been undervalued, encouraging bargain hunters to buy," Huang said.

TS Financial Holding Co. rose 2.23 percent to close at NT$41.20, and E. Sun Financial Holding Co. ended up 1.50 percent at NT$40.50, while Fubon Financial Holding Co. closed down 1.03 percent at NT$143.50.

"Investors should keep a close eye on the August U.S. nonfarm payrolls data (due Friday) as an indicator of what the Fed might decide to do," Huang said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$91.35 billion in shares on the market Wednesday.