Taipei, Aug. 2 (CNA) Shares in Taiwan took a beating, plunging more than 200 points Tuesday, as worries over cross-strait tensions escalated ahead of an expected visit by U.S. House of Representatives Speaker Nancy Pelosi, dealers said.

Selling was seen across the board with large cap stocks in both electronic and non-tech sectors highlighted, while turnover remained moderate, indicating many investors were reluctant to buy during the dips amid fears China will take retaliatory action in response to Pelosi's visit, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 234.46 points, or 1.56 percent, at 14,747.23, after moving between 14,663.46 and 14,860.94. Turnover totaled NT$214.88 billion (US$7.15 billion).

The market opened down 0.81 percent and selling accelerated, pushing the Taiex below the 14,800-point mark by the end of the session as the U.S. House Speaker is expected to arrive in Taiwan Tuesday night as part of a tour of Asia, dealers said.

Pelosi's expected trip to Taiwan was first reported on July 19 by the Financial Times. In a phone conversation conducted on July 28, which is believed to have touched on Pelosi's visit, Chinese President Xi Jinping (習近平) told U.S. President Joe Biden "those who play with fire will eventually get burned," according to Chinese official news media.

"Due to Pelosi's expected visit, tensions across the Taiwan Strait have risen," Mega International Investment Services Corp. analyst Alex Huang said (黃國偉) said. "Any equity market is vulnerable to political leads like this and that's why the Taiex came under heavy pressure throughout the session."

The People's Liberation Army (PLA)'s Eastern Theater Command released a short video on social media Monday featuring land, sea and airborne exercises, with the post underlining that it was "ready for battle."

Also on Monday, Chinese state-controlled broadcaster China Central Television broadcast the test firing of a Dongfeng-17 ballistic missile, which it said was evidence of the Chinese military's "solid strength."

Pelosi, who embarked on an Asian tour Sunday, is scheduled to arrive in Taiwan Tuesday night, according to foreign and local media reports. She is expected to visit the Legislative Yuan and meet with President Tsai Ing-wen (蔡英文) Wednesday morning before wrapping up her short trip, according to the reports.

"It is possible Beijing will increase its pressure on Taiwan to demonstrate its anger as a Pelosi visit would overstep China's red line. It is a matter of face," Huang said.

"It was no surprise that investors rushed to cut their holdings today to avoid further losses down the road," he added. "Few investors appeared willing to pick up bargains for the moment despite the heavy losses, which kept turnover moderate."

The sell-off took a toll on the bellwether electronics sector, which includes many liquid large cap stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), Huang said.

TSMC, the most heavily weighted stock on the local market, tumbled 2.38 percent to close at NT$492.00. Led by TSMC, the electronics sector and the semiconductor sub-index lost 1.84 percent and 2.39 percent, respectively.

Among other semiconductor heavyweights, United Microelectronics Corp. (UMC), a smaller contract chipmaker, lost 2.98 percent to end at NT$39.10 and Powerchip Semiconductor Manufacturing Corp., another smaller contract chipmaker, also fell 4.07 percent to close at NT$34.20.

In addition, dynamic random access memory chip supplier Nanya Technology Corp. lost 3.45 percent to end at NT$50.40 and power management solution IC designer Silergy Corp. fell 3.32 percent to close at NT$524.00, while application-specific IC (ASIC) designer Alchip Technologies Ltd. bucked the downturn, rising 1.67 percent to end at NT$669.00.

Also in the tech sector, buying rotated to select stocks with point of sale (POS) management system supplier Posiflex Technology Inc. soaring 5.52 percent to close at NT$153.00 on an increase in shipments, and Internet network device supplier Accton Technology Corp. also rising 0.79 percent to end at NT$255.00 on solid demand.

The transportation sector, where the major shipping and airline stocks are traded, also faced a sell-off throughout the session, falling 2.76 percent and adding downward pressure to the broader market, Huang said.

In the sector, shares in Evergreen Marine Corp., the largest container cargo shipper, lost 2.78 percent to close at NT$93.30, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. fell 2.78 percent and 2.33 percent, respectively, to end at NT$87.50 and NT$105.00. In addition, China Airlines lost 3.79 percent to close at NT$21.55, and EVA Airways shed 4.25 percent to end at NT$31.55.

Following China's imposition of a ban on products from more than 100 Taiwanese food companies on Tuesday, the food sector fell 2.15 percent, with Uni-President Enterprises Corp. losing 3.00 percent to close at NT$67.90, and Wei Chuan Foods Corp. dropping 2.46 percent to end at NT$19.85.

Elsewhere, Formosa Chemicals & Fibre Corp. lost 1.71 percent to close at NT$68.90, and Eclat Textile Co. fell 1.95 percent to end at NT$403.00.

"Today's sell-off plunged the Taiex below the nearest technical resistance at around 14,900 points and I think fragile market sentiment will result in more selling," Huang said. "The National Stabilization Fund could intervene in the event of more losses."

The NT$500 billion stabilization fund has been authorized to intervene in the equity market since July 12 to serve as a buffer against unexpected external factors that might disrupt market movement.

According to the TWSE, foreign institutional investors sold a net NT$19.66 billion worth of shares on the main board on Tuesday.