taiwan: Stocks of semiconductors under pressure as tensions with Taiwan grow
China views the visit by Pelosi, second in the line of succession to the US presidency and a long-time critic of China, as sending an encouraging signal to the pro-independence camp in Taiwan and has repeatedly warned against it.
Taiwan is home to the world's biggest manufacturer of semiconductors on contract, Taiwan Semiconductor Manufacturing Co Ltd (TSMC). Shares of the company closed down 2.4 percent, while peer United Microelectronics Corp (UMC) fell 3 percent.
Taiwanese stocks dropped 1.6 percent, marking their biggest percentage decline in three weeks, while stocks in China posted their biggest fall in more than two months as mounting tensions unsettled Asian financial markets.
"The outlook for trade in Asia is likely to weigh on semiconductors, given how much of the world's global production comes from Taiwan," said Michael Hewson, chief market analyst at CMC Markets UK.
Semiconductor stocks globally felt the heat. Germany's Infineon declined 2.3 percent, while Dutch firms ASML, ASMI, and BESI fell between 3 percent and 4 percent. US chip stocks such as Nvidia Corp, Intel Corp, Qualcomm and Micron Technology Inc dipped more than 1 percent each in trading before the bell.
"This market reaction is expected following the strong performance of equity markets in July," said Andrea Cicione, head of strategy at TS Lombard in London.
"The longer term impact is unlikely to be significant unless the situation escalates, which wouldn't be my expectation right now."
Pelosi was set to visit the island, as several Chinese warplanes flew close to the median line dividing the Taiwan Strait.
( Details and picture courtesy from Source, the content is auto-generated from RSS feed.)
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