Taiwan shares hit hard by Wall Street losses
2015-01-06 16:00:46

    Taipei, Jan. 6 (CNA) Shares in Taiwan closed sharply lower Tuesday after Wall Street suffered heavy losses overnight amid concerns over debt problems in the eurozone and the shock created by a plunge in international crude oil prices, dealers said.

    Selling was concentrated in market heavyweights not only in the bellwether electronics sector but also in the old economy sector, while the financial sector also felt downward pressure throughout the session, they said.

    Select transportation stocks, such as China Airlines (CAL), appeared resilient, however, and outperformed the broader market as investors anticipated lower fuel costs would strengthen those companies' bottom lines, dealers said.

    The weighted index on the Taiwan Stock Exchange (TWSE) closed down 225.77 points, or 2.43 percent, at 9,048.34, after moving between 9,043.44 and 9,209.93, on turnover of NT$110.20 billion (US$3.44 billion).

    The market opened down 0.69 percent in a knee-jerk reaction to a 1.86 percent fall in the Dow Jones Industrial Average overnight driven by worries that the anti-austerity opposition in debt-stricken Greece will win parliamentary elections and complicate debt problems in the eurozone, dealers said.

    A plunge in crude oil prices in New York overnight to below US$50 per barrel for the first time in almost six years also left investors here concerned that further volatility on Wall Street could send ripples through global markets, dealers said. "Judging from the expanded turnover, I think many investors panicked today, rushing to sell stocks after a plunge on Wall Street and heavy losses in other regional markets," Mega International Investment Services Corp. analyst Alex Huang said. "Large-cap stocks became the major targets of the latest sell-off. I think selling largely came from foreign institutional investors," Huang said.

    According to the TWSE, foreign institutional investors sold a net NT$18.07 billion in local shares on the main board Tuesday.

    The bellwether electronics sector closed down 2.69 percent. Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, lost 4.30 percent to close at NT$133.50 on turnover of 66.83 million shares. "Although some electronics companies, such as Largan Precision Co., reported strong sales data, their shares did not respond to positive leads and fell in line with the broader market," Huang said. "I think investor sentiment toward the whole market has soured."

    Largan, a smartphone camera lens supplier to Apple Inc., fell 3.19 percent to close at NT$2,275.00 after the company reported a record NT$5.75 billion in consolidated sales for December, helped by strong sales of the new iPhones.

    In the non-high tech sector, Nan Ya Plastics Corp. lost 3.29 percent to close at NT$61.80, and Formosa Plastics Corp. shed 3.50 percent to end at NT$69.00.

    Among financial shares, Fubon Financial Holding Co. closed down 3.77 percent at NT$48.50, and Cathay Financial Holding Co. ended down 3.13 percent at NT$44.95.

    Bucking the general downturn, CAL, the largest international airline in Taiwan, rose 1.68 percent to close at NT$15.10, and shipper Wan Hai Lines gained 0.18 percent to end at NT$28.25 due to falling fuel costs. "Further losses in the local bourse are possible as long as Wall Street remains volatile," Huang said. "If there is any further downturn, the local index could fall below 9,000 points soon and make the market even technically weaker."

(By Frances Huang)