TAIPEI: Shares in Taiwan took a beating Thursday amid expectations that the U.S. Federal Reserve will kick off an interest rate hike cycle in December, although the Fed decided overnight to leave its key interest rates unchanged at this time, dealers said.
Selling focused on large-cap stocks across the board amid fears that once the U.S. central bank raises its rates, foreign investors will move their funds out of the region into U.S. dollar denominated assets, dealers said.
Taiwanese suppliers to Apple Inc. led the falling trend in the bellwether electronics sector after the U.S. company reported a sequential revenue drop in the greater China market for the July-September period, dealers said.
The weighted index on the Taiwan Stock Exchange ended down 94.91 points, or 1.10 percent, at 8,571.08, after moving between 8,568.13 and 8,705.59. Turnover totaled NT$85.31 billion (US$2.62 billion) during the session.
The market opened up 0.19 percent and rose to the day’s high in an initial reaction to a strong showing on Wall Street, where the Dow Jones Industrial Average closed up 1.13 percent overnight after the Fed decided Wednesday to maintain its key interest rates, dealers said.
But after the weighted index briefly breached the 8,700-point mark, selling set in among market heavyweights as investors took into account a Fed statement that hinted at an interest rate hike in December, dealers said.
“In determining whether it will be appropriate to raise (rates) at its next meeting, the committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2 percent inflation,” the Fed said in its statement.
