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
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,"
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
"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)