Taiwan stocks fell 3.2 percent to their lowest close in more than 2-years on Thursday, ignoring a government move to boost the market with a tax break on worries about big tech names like TSMC struggling with weaker demand.
The main TAIEX closed down 206.06 points at 6,251.95, the lowest finish since December 14, 2005, even after Taiwan's government said late on Wednesday it would halve the stock transaction tax for the next half year to try to support the market.
Despite the drop, leaving the market down 27 percent year to date, the government has yet to activate the National Stabilisation Fund, Vice Finance Minister William Tseng told a news conference late in the day. Turnover shrank to T$85.46 billion ($2.67 billion) from T$93.49 billion in the previous day, while analysts say state funds kicked in to cushion the market by midday.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the market's most heavily weighted stock, fell 2.6 percent after the chipmaker reported sales continued to slow in August. Its cross-town rival United Microelectronics Corp (UMC) slipped 6.1 percent. "There seems to be a consensus that the two companies won't be doing well in the fourth quarter," said Michael On, directing manager at Beyond Asset Management.
Analysts are fretting that lower capacity utilisation rates and average selling prices could further hurt the bottom lines of the world's two biggest foundries in the last quarter of the year.
Shares of Kinik Co, which supplies diamond disks for wafer production to TSMC and UMC, dropped 5 percent after the company told Reuters that demand for its products would slow in the coming months. LCD maker AU Optronics edged down 2.6 percent after larger South Korean rival LG Display cut its third-quarter outlook. Top electronics parts maker Hon Hai Precision Industry gave up early gains to end down 1.7 percent even after the company released solid August sales.
Comments
Comments are closed.