TAIEX closes 162 points amid volatility in Hong Kong
AT THE SEA:
Shipping stocks were hit particularly hard by the slowdown, with Evergreen, Yang Ming and Wan Hai down 10%, while tech stocks showed resilience.
Yesterday, TAIEX closed more than 160 points, with investors taking their cue from losses in other regional markets, including Hong Kong, where transactions by debt-ridden Chinese real estate developer Evergrande Group (恆大 集團) have been suspended, dealers said.
Old economy stocks, especially in the shipping industry, came under heavy pressure, pushing the market as a whole into negative territory, while some major tech stocks posted gains or recovered some. part of their losses to support the main board at the end of the session, they mentioned.
Heavy losses in large-cap shipping stocks pushed the transportation sector down 7.37%, causing the market as a whole to fall, they added.
TAIEX closed down 162.54 points, or 0.98%, at 16,408.35. Turnover totaled NT $ 299.54 billion (US $ 10.75 billion), with foreign institutional investors selling NT $ 3.11 billion net of shares.
Amid regional market volatility, market sentiment here has been hit as margin calls on shipping stocks after their recent drops have prompted many retail investors to hurry to dump these stocks. Concord Securities Co (康 和 證券) analyst Kerry Huang (黃志祺) said.
A margin call occurs when the value of an investor’s margin account falls below the amount required by the broker, forcing the investor to deposit more money or sell some of the assets in the account.
“Despite a 160 point drop in TAIEX, revenue remained low today, indicating that there could be more sales to come in these shipping stocks, which could pave the way for further losses on the road, ”Huang said.
Among container shipping stocks facing margin calls, shares of Evergreen Marine Corp (運 海運), Yang Ming Marine Transport Corp (運 海運) and Wan Hai Lines Ltd (海 海 航運) plunged by 10 percent, the maximum daily decline, closed at NT $ 102.5, NT $ 97.2 and NT $ 165.5, respectively.
“While the benchmark electronics sector as a whole finished below the previous close, some large cap stocks, particularly in the semiconductor industry, appeared resilient relative to the broader market. “Huang said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, US) fell 0.35% to close at NT $ 572 after hitting a low of NT $ 569. Led by TSMC, the electronics sector fell 0.8% to close at 772.52.
“I suspect that some government-led funds have backed TSMC in order to prevent the broader market from falling further by taking advantage of the huge weighting of the stock,” Huang said.
“We need to watch closely if TAIEX will maintain its strength above the next technical support at 16,248 points, the intraday low of August 20. Otherwise, further losses could push the main draw to test 16,000 points,” he said. he declared.
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