Taiwan stock market suffers biggest one-day drop in history

By Egypt Independent

The Taiwan stock market tumbled 660.72 points Thursday, recording its steepest one-day point drop in history, to close below the 10,000-point mark in the wake of Wall Street`s worst losses in eight months.

The benchmark weighted index on the Taiwan Stock Exchange (Taiex) closed down 660.72 points, or 6.31 percent, at 9,806.11 after moving between 9,797.93 and 10,272.04. Turnover totaled NT$205.33 billion (US$6.59 billion) during the session.

In the wake of the Dow Jones Industrial Average`s plunge of 831 points in the U.S. Wednesday, the local market opened down 194.79 points at 10,272.04 and dropped below 10,000 points in 90 seconds.

Amid lingering fears over further fund outflows, the Taiex continued to fall, taking by 668 points at one point, and by the close had lost 660.72 points, its biggest single-day drop in history.

The previous one-day record was a loss of 542.25 points on Feb. 6.

Due to the stock market plunge, the total market capitalization of the local equity market shrunk by NT$1.98 trillion on Thursday to less than NT$30 trillion.

All the major stock categories lost ground, with shares of more than 555 companies on the Taiex and the over-the-counter market dropping by the daily maximum 10 percent.

In the bellwether electronics sector, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., lost 9.89 percent to end at NT$3,235.00, while contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on Taiwan`s market, fell 7.26 percent to finish at NT$227.50.

Hon Hai Precision Industry Co., the world`s largest contract electronics maker, slid 6.9 percent to NT$70.10.

In the old-economy sector, Formosa Plastics Corp. shed 9.25 percent to close at NT$103.00, while Nanya Plastics Corp. lost 6.85 percent to end at NT$76.10 and Taiwan Cement Corp. ended 6.51 percent lower at NT$37.60.

Foreign institutional investors sold a net NT$30.21 billion worth of shares on the main board Thursday, according to Taiex data.

Shawn Hsueh (), an analyst with Yuanta Securities Investment Consulting Co., said the Dow`s 800-point drop on Wednesday, its worst in eight months, was due to rising bond yields that have been drawing investors out of the stock market.

Although the losses were widespread, U.S. technology companies and retailers suffered the steepest declines, he said.

The Taiex and other Asian equity markets followed the U.S. markets downward, as the International Monetary Fund cut its global growth forecast amid tensions between the U.S. and its trading partners, which have started to hurt economic activity worldwide, according to Shawn.

Last week, Taiwan posted the steepest decline among the regional markets, when the Taiex fell 489.22 points, or 4.44 percent, to close at 10,517.12 on Oct. 5.

Prior Thursday`s drop, the Taiex had been holding above 10,000 points for nearly 17 months after it rose to 10,007.84 points on May 23, 2017.

This article provided by NewsEdge.