Shares in Taiwan gave up earlier gains to close slightly lower Tuesday as market sentiment remained affected by geopolitical tensions between Russia and Ukraine, dealers said.
Investors were also cautious about the next move to be made by the U.S. Federal Reserve to tighten its monetary policy amid rising concerns over inflationary pressure, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 45.86 points, or 0.25 percent, at 17,951.81 after moving between 17,942.68 and 18,085.91. Turnover totaled NT$231.84 billion (US$8.31 billion).
The market opened down 0.11 percent and soon regained its footing in the early morning session on a mild technical rebound from a 1.71-percent plunge in the previous session, dealers said.
The 18,000-point mark
But, after the Taiex breached 18,000 points, selling set in and become more prevalent in the late trading session with large-cap stocks in both the electronics and non-tech sectors which pushed the broader market below that level again at the end of the session, dealers added.
Mega International Investment Services Corp. analyst Alex Huang said Tuesday’s movement showed the local main board was still faced with strong technical resistance around 18,000 points.
“Investors continued to weigh the military tensions along the border between Russia and Ukraine after a warning from the United States,” Huang said. The White House has issued a warning that a war in Ukraine could start “any day now” and urged Americans there to leave “immediately.”
“It was no surprise that liquid heavyweight stocks on the main board saw their gains erode, in particular in the afternoon session. Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) was affected by profit-taking despite no concerns over its fundamentals,” Huang said.
Tech stocks
TSMC, the most heavily weighted stock in the local market, fell by 0.63 percent to close at NT$633.00 after hitting a high of NT$639.00 Tuesday. On Monday, TSMC tumbled by 2.00 percent, which significantly impacted the Taiex.
TSMC’s weakness caused the electronics index to fall by 0.30 percent to end at 858.42, off a high of 866.25, with the semiconductor sub-index down by 0.49 percent. The stock’s losses contributed about 30 points to the Taiex’s decline.
Other semiconductor stocks largely came off their highs with Powerchip Semiconductor Corp., a smaller contract chipmaker, falling by 1.79 percent to close at NT$60.40; power management IC designer Silergy Corp. dropping by 1.31 percent to end at NT$3,775.00; and smartphone IC designer MediaTek Inc. decreasing by 0.45 percent to close at NT$1,150.00.
Bucking the downturn, United Microelectronics Corp. (UMC), another contract chipmaker, rose by 0.94 percent to end at NT$53.50 but came off a high of NT$54.30.
“UMC shares have fallen below the 240-moving average of NT$56.70 after a recent sell-off amid fears over a supply glut in the mature 28-nanometer process and today’s gains remained in consolidation mode,” Huang said.
Other sectors
In the old economy sector, Formosa Plastics Corp. fell by 0.95 percent to close at NT$104.00 and Nan Ya Plastics Corp. fell by 1.13 percent to end at NT$87.40 on profit-taking. After coming off highs during the day, China Steel Corp. dropped by 1.27 percent to close at NT$35.05 and Chung Hung Steel Enterprise Corp. declined by 1.76 percent to end at NT$39.10.
The financial sector fell by 0.45 percent to close at 1,794.22, off a high of 1,808.45. In the sector, CTBC Financial Holding Co. declined by 1.75 percent to end at NT$28.15, and Mega Financial Holding Co. fell by 0.91 percent to close at NT$38.10, while Fubon Financial Holding Co. increased by 0.66 percent to end at NT$76.60.
The tourism sector attracted strong buying, enabling it to finish up 1.06 percent after the Central Epidemic Command Center outlined a plan Monday to shorten quarantine for people arriving in Taiwan and ease border restrictions for business travelers, Huang said.
Among hotel operators, FDC International Hotels Corp. increased by 1.15 percent to close at NT$39.65, My Humble House rose by 1.98 percent to end at NT$23.20, and Leofoo Development Co. rose by 2.60 percent to close at NT$17.75.
Airline stocks also rode the wave of hopes on border-control easing with China Airlines up 2.81 percent to end at NT$27.45, and EVA Airways up 7.39 percent to close at NT$31.25.
Medigen’s EUA boost
On the over-the-counter market, Medigen Vaccine Biologics Corp. soared by 10 percent, the maximum daily increase limit, to end at NT$265.00 after the company secured emergency use authorization (EUA) in Paraguay for its COVID-19 vaccine.
“Today’s thin turnover also reflected lingering concerns over the Fed’s tightening, which has prevented many investors from jumping into the market,” Huang said. “So, investors had better continue to pay close attention to the U.S. markets which are sensitive to any Fed move.”
According to the TWSE, foreign institutional investors sold a net NT$16.22 billion worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel