Taiwan stocks suffer record plunge on Monday

Taiwan’s stock market experienced a historic collapse on Monday, with the main index plummeting a staggering 8.4 per cent.

The Taiwan Stock Exchange Weighted Index closed at 19,830.88, shedding a massive 1,807.21 points.

This decline was driven by a brutal sell-off in the tech sector, with TSMC, the world’s largest contract chipmaker, bearing the brunt of the losses. TSMC’s share price tumbled 9.75 per cent, close to its daily limit of 10 per cent.

The market sell-off stemmed from a confluence of negative factors:

Fears of a Global Recession: A grim outlook for the US economy, fuelled by weak jobs data and concerns about a potential recession, triggered a flight from riskier assets like tech stocks.

Widening Middle East tensions: Growing anxieties surrounding a potential escalation of conflict in the Middle East further dampened investor sentiment.

The recent tech stock selloff in the US, with the S&P 500 down nearly six per cent and the Nasdaq Composite experiencing a 10 per cent correction, spilled over into the Taiwanese market.

“We think the decline will continue into the next two days, seeking technical support levels of 19,200-19,300 points,” Allen Huang, a vice president of Mega International Investment Services, Huang told Reuters.

However, Taiwan’s Minister of Economic Affairs, JK Guo, warned investors to brace for potential further pain, suggesting a global stock market crash could be part of the current economic cycle.

The Taiwan Stock Exchange will hold a press conference later today at 3 pm (07:00 GMT) to address the recent market movements and outline their contingency plans in response to the situation.

Attribution: Reuters