Shares in Taiwan closed slightly lower Wednesday, with market sentiment bothered by lingering worries over a possible recession at a time of aggressive rate hikes by major central banks around the world, dealers said.
Despite the downturn on the main board, buying rotated to the financial sector, providing some support to the broader market and offsetting losses suffered by select large tech stocks, in particular in the semiconductor industry, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 24.99 points, or 0.18 percent, at 14,199.13 after moving between 14,177.97 and 14,257.45. Turnover totaled NT$161.01 billion (US$5.22 billion).
The market opened down 0.26 percent in a knee-jerk reaction to a lackluster performance on United States markets, where the Dow Jones Industrial Average lost 0.03 percent and the tech-heavy Nasdaq index fell 0.76 percent Tuesday, dealers said.
The Taiex moved up and down in a narrow range around the previous closing level before selling increased in the last few minutes of the session, pushing down contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) which dragged the broader market into negative territory at the end of the session, dealers added.
“Looking at the Dow and Nasdaq, concerns over a possible recession continue to dominate the global markets and Taiwan is no exception,” Mega International Investment Services Corp. analyst Alex Huang said, citing massive rate hikes by the world’s major central banks, including the U.S. Federal Reserve, to combat inflation as being behind the economic weakness.
“The thin turnover showed many local investors were reluctant to trade, paving the path for a quiet session,” Huang said.
TSMC
Without enthusiastic interest in buying, the local bellwether electronics sector remained in the doldrums, led by TSMC, the most heavily weighted stock on the local market, which lost 0.77 percent to close at NT$449.50 after selling peaked in the late trading session.
TSMC’s losses contributed about 30 points to the Taiex’s decline and led the electronics index and semiconductor sub-index to move lower by 0.37 percent and 0.63 percent, respectively.
“Caution over TSMC shares prevailed as investors have kept alert over falling global chip demand,” Huang said. “The chipmaker has scheduled an investor conference for Jan. 12 and investors have been anxiously waiting for the company’s guidance for the first quarter.”
Some foreign brokerages expect TSMC will see its sales for the first quarter fall 10 percent to 15 percent from the previous quarter.
Other tech firms
TSMC selling spread to other smaller contract chipmakers, with United Microelectronics Corp. falling 0.85 percent to end at NT$41.05 and Powerchip Semiconductor Manufacturing Corp. shedding 0.31 percent to close at NT$32.25.
However, select IC design stocks attracted rotational buying, Huang said. Among them, shares in high-speed IC designer Asmedia Technology Inc. rose 5.04 percent to end at NT$750.00, and application-specific integrated circuit (ASIC) designer Alchip Technologies Ltd. gained 2.81 percent to close at NT$879.00.
Bucking the upturn, smartphone IC designer MediaTek Inc. lost 1.24 percent to end at NT$636.00.
Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co. lost 1.01 percent to close at NT$98.10, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.20 percent to end at NT$2,100.00.
“Rotational buying also spread to large cap financial stocks, preventing the main board from falling further,” Huang said.
Financial, transportation, steel stocks
The financial sector rose 0.33 percent with Fubon Financial Holding Co. rising 1.42 percent to close at NT$57.20, and CTBC Financial Holding Co. gaining 0.90 percent to end at NT$22.35.
Cathay Financial Holding Co. closed unchanged at NT$39.95.
The transportation sector moved lower by 1.69 percent as bulk cargo shippers came under pressure after the Baltic Dry Index (BDI), which gauges the freight fares of bulk cargo shippers, plunged 17.5 percent overnight.
Among the major bulk cargo shippers, Wisdom Marine Lines Co. shed 4.15 percent to end at NT$60.00, Sincere Navigation Corp. fell 2.29 percent to close at NT$19.20, and Chinese Maritime Transport Ltd. ended down 1.76 percent at NT$39.10.
Elsewhere in the old economy sector, China Steel Corp., the largest steel maker in Taiwan, lost 1.16 percent to close at NT$29.90, while Tung Ho Steel Enterprise Corp. ended unchanged at NT$51.80.
U.S. job data
“Investors need to keep a close eye on the minutes of the Fed’s last policymaking meeting and the U.S. December job data to be released later this week for more clues about what the American central bank will do with its current rate hike cycle,” Huang said.
According to the TWSE, foreign institutional investors sold a net NT$5.59 billion worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel