Taiwan shares under pressure amid renewed trade friction fears

2018/07/11 11:55:14 fontsize-small fontsize-default fontsize-big
Taiwan shares under pressure amid renewed trade friction fears

Taipei, July 11 (CNA) Taiwan shares plunged more than 100 points Wednesday morning amid renewed concerns over global trade friction after the United States released a list of US$200 billion worth of Chinese goods that could be hit by new tariffs, dealers said.

Large cap stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), were hardest hit by the selling, but bargain hunting appeared to limit the losses, they said.

As of 11:16 a.m., the weighted index on the Taiwan Stock Exchange, the Taiex, had fallen 87.58 points or 0.81 percent to 10,669.31 on turnover of NT$73.60 billion (US$2.41 billion), off an early low of 10,635.03.

"Investors were shocked by Washington's latest move targeting more Chinese exports," Xincheng International Investment Consultant analyst Chang Chih-cheng said.

"Many of them saw the Dow Jones futures falling more than 200 points and feared the trend will continue when U.S. markets open later today, which could send other markets around the world into a tailspin," Chang said.

On Tuesday, the Trump administration released a list of US$200 billion in Chinese goods that could be hit with 10 percent tariffs, part of a U.S. strategy to retaliate for what it sees as China's longtime unfair trade practices.

The new tariffs will not go into effect immediately, however, as there will be a two-month review process, with hearings scheduled for Aug. 20-23, according to the U.S. government.

"The new tariffs are not immediate threats. I'd say the losses seen today in Taiwan and other markets in the region were a jerk-knee reaction," Chang said.

"So some bargain hunters here were willing to jump in, preventing the Taiex from falling further."

Among the affected market heavyweights, TSMC, the most heavily weighted stock in the local market, had lost 1.13 percent to NT$219.50 as of 11:16 a.m.

Led by TSMC, the bellwether electronics sector was down 0.96 percent and the semiconductor sub-index was 1.01 percent lower.

Also in the high-tech sector, integrated circuit designer MediaTek Inc. had lost 1.61 percent to NT$275.50, and PC brand Asustek Computer Inc. had dropped 3.05 percent to NT$254.50.

Elsewhere, Cathay Financial Holding Co. had fallen 1.35 percent to NT$51.10 and Fubon Financial Holding Co. had lost 1.09 percent to NT$49.95.

"It seemed the Taiex has strong technical support as it moves closer to the 10,600-point mark," Chang said.

(By Frances Huang)
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