Market capitalization of Taiwan’s main board drops more than 1% after Friday’s sell-off

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Taipei, May 7 (CNA) The market capitalization of Taiwan’s main board fell more than 1% this week after the benchmark weighted index fell on Friday following large foreign institutional sales, according to the Exchange. of Taiwan (TWSE).

This week, the market capitalization of the local exchange fell around 1.08% from the previous week to NT$50.94 trillion ($1.72 trillion) after the Taiex plunged 287.92 points, or 1.72%, to close at 16,408.20.

For the week, the Taiex lost 1.11%, marking the second straight week of declines.

Main board value was wiped out this week as foreign institutional investors continued to hold on to the sell side on Friday, recording a net sale of NT$23.56 billion, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) as one of their top 10 targets in the sale, according to data compiled by TWSE.

On Friday, foreign institutional investors sold 10.01 million net shares of TSMC, sending the most weighted stock in the local market down 14 Taiwan dollars or 2.58%. TSMC’s losses sent the electronics sector down 2.03% and the semiconductor sub-index down 2.44%.

Besides TSMC, Shin Kong Financial Holding Co., Fubon Financial Holding Co., Taishin Financial Holding Co., China Steel Corp., Yuanta Financial Holding and China Development Financial Holding Co. were also among the top 10 targets.

US Fed rate hike

The Taiex came under heavy pressure on Friday as investors were stunned by the tumble in US markets, where the Dow Jones Industrial Average fell 3.12% and the tech-heavy Nasdaq index lost 4.99% Thursday.

Market analysts said investor sentiment at home and abroad remained haunted by a rate hike cycle launched by the US Federal Reserve, although Fed Chairman Jerome Powell ruled out further action. aggressively, saying after a policy-making meeting ended on Wednesday that a 75 basis point rate increase was not something the committee was actively considering.

At the meeting, the Fed raised its key rates by 50 basis points after a 25 basis point hike in March.

Analysts said while Powell did not appear as hawkish as the market expected, the Fed still tightened monetary policy, heightening fears that his actions to take funds from the market could hurt the economy. ‘economy.

War in Ukraine

In addition, the geopolitical crisis resulting from a Russian-led war against Ukraine has also created more uncertainty in global financial markets, especially as the European Union on Wednesday proposed new sanctions against the Kremlin. , including a six-month phase-out of Russian crude. oil imports.

On Friday, the Dow fell another 0.30%, with the Nasdaq index dropping 1.40%. Analysts said weakness in US markets could add more downward pressure on the local stock market.

This week, the local semiconductor industry, which has been highlighted by the foreign institutional sale, recorded a turnover of NT$272.65 billion, accounting for 32.71% of the total on the chart. main, followed by the transport industry (20.78%) and electronics. the component industry (8.41%), according to TWSE data.

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