By Faith Hung and James Pomfret
TAIPEI (Reuters) – Taiwan stocks ended down 8.4% on Monday, a record slump, with tech stocks including TSMC plunging as investors sold off one of Asia’s top performing markets this year, spooked by a poor outlook for global tech stocks and the U.S. economy.
The main index shed 1,807.21 points, its worst one-day percentage fall, to close at 19,830.88, the lowest level since April 23. The decline was fuelled by a sell-off in tech, and then spread more broadly as the index dipped below the key 20,000 level.
“It is difficult to predict when the decline will stop. It’s too early to tell,” said David Wu, an analyst with Cathay Futures Consulting Department in Taipei.
Taiwan was one of several markets that tumbled across Asia on Monday amid fears the United States could be heading for recession and as investors sought refuge from risk assets.
Concerns about a widening conflict in the Middle East also weighed on sentiment.
The Taiwan Stock Exchange will hold a media conference to “explain recent market movements and contingency response plans” at 3 p.m. (0700 GMT), the exchange said in brief statement. No further details were given.
A two-day rout late last week left the S&P 500 nearly 6% from its July peak while the tech-heavy Nasdaq Composite extended losses to notch its first 10% correction from a record high since early 2022.
“We think the decline will continue into the next two days, seeking technical support levels of 19,200-19,300 points,” Allen Huang, a vice president of Mega International Investment Services, Huang told Reuters.
Shares in the dominant technology stock Taiwan Semiconductor Manufacturing (TSMC), the world’s largest contract chipmaker, took a battering. The stock had surged over the past year amid skyrocketing demand for chips used in artificial intelligence, but its price plunged 9.75%, near the daily limit of 10%, to close at T$815.
“The fundamentals for TSMC have not changed at all. Yes, there was market talk last week that delivery of Nvidia’s new GB 200 chips would be delayed, and Intel’s earnings results were terrible. But TSMC and the upstream AI supply chain would not be affected by those events,” Huang added.
Taiwan’s Minister of Economic Affairs JK Guo, said investors needed to brace for more possible pain. “Everyone must be prepared for a global stock market crash, this is part of the business cycle,” Guo told reporters.
(Reporting by Faith Hung and James Pomfret; Additional reporting by Jeanny Kao and Roger Tung; Writing by James Pomfret; Editing by Miral Fahmy and Sonali Paul)
Comments