Taiwan stocks fell 3.45 percent on Monday, their biggest daily drop in two months, as investors sold shares across the board following recent rallies, sending heavyweights such as TSMC sharply lower. The main TAIEX share index closed 222.67 points lower at 6,225.56, its weakest finish since April 30 and the biggest single-day percentage fall since April 17.
The day's decline extended a worst weekly drop in seven months hit last week. Turnover was light at T$112.6 billion ($3.4 billion), lower than T$128.8 billion recorded the previous session. Despite the day's decline, the TAIEX has jumped more than 47 percent since touching the year's trough in late January.
Taiwan Semiconductor Manufacturing Co (TSMC), the world's top contract chipmaker and the most active share by turnover, slid 4.8 percent, pulling the semiconductor sub-index 4.9 percent lower. "Investors continued to take profit. Foreign investors also took a more negative view on local stocks and sold heavyweights like TSMC and UMC," said Tu Jin-lung, chairman of Grand Cathay Investment Services.
Tu expects the TAIEX to continue pulling back and drop as low as 6,000 this week. TSMC's smaller rival United Microelectronics Corp (UMC) dropped 6.8 percent to its daily limit, with the electronics sub-index ending 3.9 percent lower. However, Wistron Corp, Taiwan's No 3 contract laptop maker, closed up by 7 percent at its daily limit.
Morgan Stanley on Monday said in a research report that Wistron's short-term valuation was compelling and maintained its "overweight" rating on the company. The financial sub-index, which has gained 60 percent since hitting a low in early March, declined 2.7 percent. Chinatrust Financial fell 0.5 percent and Fubon Financial dropped and 1.7 percent, giving up gains early in the session. Chinatrust Financial and Fubon Financial were cited in a local newspaper report as being likely to benefit from China's recently announced rules regulating its investors in Taiwan's financial sector.
Comments
Comments are closed.