Dealers reported that there is an increasing drop in the shares of Taiwan from the previous session as the major suppliers to Apple Inc. got pressurized after the United States consumer electronics giant was downgraded amidst worry over shipments of iPhones.
Market sentiment was also impacted by lowered hopes that the US Federal Reserve would soon cut interest rates.
The weighted index on the Taiwan Stock Exchange decreased 48.44 points, or 0.45%, at 10,702.78, after moving between 10,680.85 & 10,733.57. Turnover totaled US$2.99 billion during the session.
The market opened down 0.45% as the investors took signals from the losses on the United States markets, where the tech-heavy NASDAQ index fell 0.78% overnight & the Dow Jones Industrial Average closed 0.43% lower following a downgrade of Apple that thrashed tech stocks.
Dealers further told that selling on the local central board continued from Monday, but the losses were covered after the Taiex dropped below 10,700 points as purchasing emerged in some old economy & financial stocks that were seen as a safe haven.
An analyst at Mega International Investment Services Corp, Alex Huang stated that selling in the stocks of large Taiwanese suppliers was triggered by the downgrade of Apple, particularly the iPhone assembler Hon Hai Precision Industry Co. & smartphone camera lens maker Largan Precision Co.
Nearly 40% of the total sales of Largan & Hon Hai are accounted for by Apple.
On Monday, shares of Apple closed down 2.06% after an analyst at Rosenblatt Securities downgraded the recommendation on the stock from ‘neutral’ to ‘sell.’
The analyst reported that Apple will probably be facing fundamental deterioration over the next 6 – 12 months amidst poor iPhone sales & slow sales growth of other products.
In the wake of that prediction, Largan dropped 2.31 percent to end at NT$4,020.00 whereas Hon Hai dropped 1.39% Tuesday to close at NT$77.90.