Shares in Taiwan moved lower Wednesday, as investors locked in their gains from the previous session, amid renewed concerns over inflation, after a spike in international crude oil prices, dealers said.
The bellwether electronics sector saw apparent profit taking, with large-cap semiconductor stocks in focus, while financial heavyweights also came under pressure throughout the session, dealers said.
The Taiex, the weighted stock on the Taiwan Stock (TWSE), ended down 132.68 points, or 0.79 percent, at 16,675.09, after moving between 16,649.91 and 16,811.04. Turnover totaled NT$252.85 billion (US$8.66 billion).
The market opened down 0.53 percent and selling escalated, sparked by a 0.7 percent fall on the Dow Jones Industrial Average and a 0.4 percent decline on the tech-heavy Nasdaq index in the United States on Tuesday, when crude prices spiked after the European Union agreed to ban most crude imports from Russia, dealers said.
TSMC
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, led the market’s downturn, falling 1.96 percent to close at NT$549.00.
On Tuesday, the stock rose 2.38 percent, driving the Taiex’s 1.19 percent gain, but its losses Wednesday pushed down the electronics sector and the semiconductor sub-index by 1.01 percent and 1.46 percent, respectively.
“Yesterday’s gains by TSMC and the Taiex largely reflected the quarterly index adjustments by MSCI Inc.,” which went into effect after the market close Tuesday,” Concord Securities analyst Kerry Huang said. “Today’s retreat came as inflation worry returned to haunt market sentiment.”
After the EU agreed to ban 90 percent of oil imports from Russia, Brent crude futures, the global benchmark, traded 1 percent higher overnight, raising worry about inflation and a more hawkish U.S. Federal Reserve, Huang said.
Concerns over an aggressive Fed have been running deeper, which helped wipe out the Taiex’s gains from the previous session, he said.
“Big electronics stocks became the focus of Wednesday’s selling, particularly after investors rushed to take profit from TSMC’s gains on Tuesday, amid concerns that rising interest rates would make the stock less attractive,” Huang said.
Other tech, financial stocks
Among the other semiconductor stocks, IC packaging and testing services provider ASE Technology Holding Co. lost 1.44 percent to end at NT$103.00, application-specific IC designer Alchip Technologies Ltd. fell 1.18 percent to close at NT$924.00, and smartphone IC designer MediaTek Inc. ended unchanged at NT$905.00.
Bucking the downturn, iPhone assembler Hon Hai Precision Industry Co. rose 1.33 percent to close at NT$104.50, after its Chairman Liu Young-way (???) said an annual general meeting on Tuesday that the company was entering the low orbit satellite business.
Hon Hai’s satellite communications device subsidiary Microelectronics Technology Inc. also showed gains, rising 2.56 percent to end at NT$64.00.
“Hon Hai, which has broad production base in China, is also likely to benefit from the easing of the COVID-19 lockdown in Shanghai, as demand is expected to recover, accordingly,” Huang said.
Meanwhile, Wednesday’s profit-taking also took a toll on the financial sector, which dropped 1.49 percent, adding to the pressure on the Taiex throughout the session, Huang said.
CTBC Financial Holding Co. shed 2.21 percent to close at NT$26.55, Cathay Financial Holding Co. lost 1.80 percent to end at 54.70, Mega Financial Holding Co. fell 1.42 percent to finish at NT$38.20, and Fubon Financial Holding Co. ended 0.78 percent lower at NT$63.60.
Outperformers
The petrochemical sector, meanwhile, benefited from the higher crude prices, gaining 0.14 percent, which helped cushion the losses on the broader market. Formosa Plastics Corp. closed up 1.43 percent at NT$106.50, and Taita Chemical Co. rose 0.85 percent to end at NT$29.75.
With the electronics sector in the doldrums, buying rotated to the transportation sector, which rose 1.52 percent.
Evergreen Marine Corp., Taiwan’s largest container cargo shipper, gained 2.85 percent to close at NT$144,50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. ended up 1.20 percent and 1.59 percent, respectively, at NT$126.00 and NT$159.50.
“Judging from today’s movement, the Taiex seems to be facing high technical hurdles ahead of the 60-day moving average of 16,836 points,” Huang said. “Investors should pay close attention to the Fed’s next move and how China’s economy will develop after the Shanghai lockdowns are eased.”
According to the TWSE, foreign institutional investors shifted to the sell side Wednesday, registering a net sell of NT$10.09 billion worth of shares on the main board, after a net buy of NT$23.26 billion the previous day.
Source: Focus Taiwan News Channel