The TAIEX yesterday took a beating, tumbling more than 200 points, with large-cap stocks in focus, as Taiwan reported its first locally transmitted case of COVID-19 in 253 days.
Heavy selling emerged across the board in the late session, in particular in the bellwether electronics sector, and pushed the TAIEX below 14,200 points by the end of trading, dealers said.
“The first indigenous COVID-19 case since April 12 struck a nerve with many investors,” Cathay Futures Consultant Co (國泰證期顧問) analyst Tsai Ming-han (蔡明翰) said. “Moreover, the escalation in the number of infections in the UK has made the market more concerned.”
Photo: Ann Wang, Reuters
The TAIEX ended down 207.50 points, or 1.44 percent, at 14,177.46, on turnover of NT$288.247 billion (US$10.098 billion), compared with NT$250.02 billion the previous session.
Foreign institutional investors sold a net NT$9.99 billion of shares on the main board.
“Today’s expanded turnover was evidence of panic selling, in particular in the late trading session,” Tsai said. “It is possible that the US markets will head south tonight, so investors in the region simply cut their holdings now to avoid more losses on Wednesday [today].”
The electronics sector declined 1.49 percent.
“After the sector’s recent strong gains, investors simply seized on virus fears to take profits,” Tsai said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) fell 1.36 percent to close at the day’s low of NT$509. Led by TSMC, the semiconductor sub-index ended down 1.57 percent.
Quanta Computer Inc (廣達電腦) ended down 1.51 percent at NT$78.3, after the company said that the latest domestic COVID-19 case involved an employee from its affiliate firm.
“It appears that the situation in Europe has been severe after the UK reported a new virus variant, prompting many investors to worry about the economy,” Tsai said.
Such worries plunged international crude oil futures contracts by 2.77 percent in New York and 2.89 percent in London.
In the wake of the falling crude prices, petrochemical stocks came under pressure, but COVID-19 fears boosted biotech stocks, dealers said.
Among them, drug brand Sinphar Pharmaceutical Co Ltd (杏輝藥品) soared 10 percent, the maximum daily amount, to close at NT$32.75, while vaccine developer Adimmune Corp (國光生技) rose 6.73 percent to end at NT$60.3 and fast test kit maker Panion & BF Biotech Inc (寶齡富錦) increased 5.46 percent to end at NT$88.9.
“The bright spot is that some countries have started to administer vaccines against COVID-19 and the US has passed a new round of stimulus measures, so I think the TAIEX will see technical support at about 14,116 points, the 20-day moving average,” Tsai said.
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