Taiex suffers 6th steepest daily point loss led by tech stocks

Taipei, Oct. 15 (CNA) Shares in Taiwan suffered their sixth-steepest single-day point loss on Thursday, plunging over 1,600 points as tech stocks were hammered by fears of a Federal Reserve rate hike after Washington released higher-than-expected inflation data overnight, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 1,655.96 points, or 3.41 percent, at 46,969.87 after moving between 46,795.38 and 48,382.75. Turnover totaled NT$1.32 trillion (US$40.98 billion), compared with NT$978.14 billion Wednesday.

"Look at the expanded turnover. I think investors scrambled to trim their holdings in panic," Hua Nan Securities analyst Kevin Su said. "They were disappointed with the U.S. September inflation data, raising concerns over a hawkish Fed."

On Wednesday, the U.S. consumer price index (CPI) data for September showed that inflation rose 3.7 percent, higher than the market forecast of 3.6 percent.

"Rising interest rates will raise fundraising costs for AI companies," Su said. "At a time of high valuations of tech stocks, such negative leads were amplified, sending their stock prices into a tailspin."

Su said losses for semiconductor stocks in the Tokyo and Seoul markets added selling in Taipei.

After its American depositary receipts lost 3.40 percent, Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of total market value, lost 2.01 percent to close at NT$2,440.00, sending the electronics index down 3.84 percent.

IC packaging and testing firm ASE Technology Holding Co. tumbled 10 percent, the maximum daily decline, to end at NT$673.00, and smartphone IC designer MediaTek Inc. slid 6.93 percent to close at NT$4,165.00.

Also in the tech sector, power management solution provider Delta Electronics Inc. shed 8.68 percent to end at NT$1,630.00, while iPhone assembler and AI server maker Hon Hai Precision Industry Co. closed down 1.44 percent at NT$239.50.

"Judging from the tech losses, I suspect foreign institutional investors continued to stand on the sell side and move their funds out of the local market," Su said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$302.56 billion of shares on the main board Thursday.

Su said that with tech stocks plunging, investors looked to park their money in defensive stocks.

Chunghwa Telecom Co. rose 2.69 percent to end at NT$152.50 and Taiwan Mobile Co. closed up 3.65 percent at NT$131.00, and Far EasTone Telecommunications Co. ended up 4.63 percent at NT$113.00.

In addition, food brand Uni-President Enterprises Corp. closed up 1.66 percent at NT$79.50, and Wei Chuan Foods Corp. ended 0.44 percent higher at NT$11.50.

Rotational buying lifted the financial sector 0.73 percent. E. Sun Financial Holding Co. closed up 3.17 percent at NT$48.80 and Mega Financial Holding Co. ended up 2.74 percent at NT$52.50.

"The Taiex fell below the 20-day moving average of 48,041 points and became technically fragile," Su said. "I expect more losses ahead until the index gets closer to 46,000 points."