Taipei: Shares in Taiwan experienced their fourth-largest point decline on Monday, dropping nearly 1,500 points due to investor apprehension over a surge in international crude oil prices, influenced by the ongoing U.S.-Israel conflict with Iran, as reported by market analysts.
According to Focus Taiwan, the Taiex, Taiwan Stock Exchange's (TWSE) benchmark index, closed down 1,489.12 points, or 4.43%, at 32,110.42, fluctuating between 31,529.36 and 32,354.61. The total turnover amounted to NT$808.33 billion (approximately US$25.35 billion). The market initially opened with a drop exceeding 1,200 points, with losses intensifying as the day progressed. At one stage, the Taiex plummeted 2,070.28 points or 6.16%, as global stock markets faced heavy losses amidst escalating inflation concerns triggered by soaring oil prices.
The widespread sell-off affected all sectors within the Taiex before stabilizing somewhat below the 32,000-point mark, thanks to bargain hunters. Nonetheless, Monday's decline ranks as the fourth-largest on record, following significant drops on April 7, 2025, August 5, 2024, and March 3, 2026.
The geopolitical instability has caused a systemic crisis, with crude prices exceeding US$100 per barrel, reported Adam Lin from Moore Securities Investment Consulting. Lin also highlighted the inflationary fears and potential global economic repercussions linked to the crude price hike, which heavily impacted tech stocks, dragging down the broader market.
The electronics sector saw a 4.89% decline, with major contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) losing 4.23% to close at NT$1,810.00, thus contributing over 600 points to the Taiex's decline. Smartphone IC designer MediaTek Inc. and IC packaging and testing service provider ASE Technology Holding Co. also faced significant losses, dropping 5.57% and 6.43%, respectively.
Other tech companies, including AI server manufacturer and iPhone assembler Hon Hai Precision Industry Co., fell by 5.61%, while power management solution provider Delta Electronics Inc. experienced a 7.58% decline.
The financial sector wasn't spared, dropping 2.01%, with Cathay Financial Holding Co. and Fubon Financial Holding Co. closing down 4.11% and 1.80%, respectively. However, some transportation firms benefited from increased shipping fares due to the conflict, with Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. posting gains.
In the petrochemical sector, companies like Taita Chemical Co. and China General Plastics Corp. saw their shares rise due to expectations of higher product prices, while Formosa Plastics Corp. faced a decline.
Lin warned of continued market volatility due to the ongoing conflict, expecting the Taiex to find technical support around its 60-day moving average of 30,756 points. The TWSE reported that foreign institutional investors engaged in a record net sale of NT$120.82 billion worth of shares on the main board Monday.