Taipei: Shares in Taiwan experienced a significant downturn, dropping over 300 points on Monday, driven by concerns over U.S. market volatility. These concerns arose after Moody’s downgraded Washington’s top credit ratings over the weekend due to the federal government’s increasing budget deficit, according to dealers.
According to Focus Taiwan, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), fell by 319.86 points, or 1.46 percent, concluding at 21,523.83. The index fluctuated between 21,496.69 and 21,786.33, with a turnover totaling NT$326.26 billion (US$10.79 billion). “Investors rushed to dump their holdings on the local main board as they fear stocks in the United States will suffer after Moody’s downgrade,” noted Hua Nan Securities analyst Kevin Su.
Su further explained, “The credit ratings cut led to a spike in benchmark U.S. 10-year treasury yields, which has made tech stocks less attractive, so it was no surprise that selling today focused on the bellwether electronics sector.” The electronics index saw a decline of 1.73 percent, with Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock, shedding 1.40 percent to close at NT$984.00, contributing significantly to the Taiex’s drop.
The negative sentiment around TSMC extended to other semiconductor stocks. MediaTek Inc., a smartphone IC designer, fell by 4.03 percent to NT$1,310.00, while ASE Technology Holding Co., a provider of IC packaging and testing services, decreased by 3.40 percent to NT$142.00. Nanya Technology Corp., a memory chip supplier, experienced a decline of 3.72 percent, ending at NT$43.95.
Su highlighted that the Taiex’s losses were primarily driven by apprehensions regarding the U.S. market outlook, overshadowing the positive expectations from the 2025 Computex. Despite this, he noted, “the artificial intelligence business is still booming.” iPhone assembler and AI server maker Hon Hai Precision Industry Co. saw a drop of 2.53 percent to NT$154.00, while Quanta Computer Inc., another AI server maker, fell by 3.27 percent to NT$266.00. Asustek Computer Inc., an AI PC brand, decreased by 2.05 percent to NT$621.00, though Compal Electronics Inc., which also produces AI servers, gained 4.86 percent to NT$29.15.
Su observed that while many non-tech stocks showed weakness, certain biotech stocks outperformed the broader market amid a rise in COVID-19 infections. Panion and BF Biotech Inc., a test kit provider, rose by 5.80 percent to NT$76.60, and vaccine developer Adimmune Corp. gained 4.86 percent, closing at NT$19.40.
Renewable energy stocks remained resilient, supported by the government’s push for green energy under its nuclear-free homeland policy. Luxe Green Energy Technology Co. rose 0.35 percent to NT$28.50, and Allis Electric Co. increased by 0.92 percent to NT$110.00. In contrast, the financial sector fell by 1.13 percent, though Mega Financial Holding Co. rose 0.86 percent to NT$41.20, and Shanghai Commercial and Savings Bank added 1.94 percent to NT$47.35.
“After today’s losses, consolidation on the main board is expected to continue, while the nearest technology support will not be seen until the index moves closer to 20,885 points, the intraday high on May 5,” Su stated. According to the TWSE, foreign institutional investors sold a net NT$13.05 billion worth of shares on the main board on Monday.