Shares in Taiwan fell Friday, reversing the gains in the previous two sessions, as selling focused on the bellwether electronics sector, in the wake of tech stocks’ losses on the United States markets overnight, dealers said.
Market sentiment remained cautious amid lingering worry over a continued aggressive rate hike cycle by the U.S. Federal Reserve, ahead of its next policymaking meeting scheduled to start on Nov. 1, dealers said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 137.95 points, or 1.07 percent, at 12,788.42, after moving between 12,723.98 and 12,891.38. Turnover totaled NT$172.73 billion (US$5.38 billion).
The market opened down 0.40 percent, and selling escalated in the mid-morning session, with large-cap electronics stocks in focus, as investors took cues from a 1.6 percent drop on the tech-heavy Nasdaq Composite on Thursday, following disappointing third-quarter earnings reported by U.S. tech giants such as Meta Platforms, dealers said.
Selling on the Taiex spread Friday to the old economy and financial sectors, pushing the index to the day’s low in the afternoon session, but some bargain hunting emerged in the last few minutes, which helped cap the losses by the close of trade, dealers said.
“Judging from today’s movement, in which some large-cap stocks in both the tech and non-tech sectors got a boost from late bargain hunting, I suspect the buying came partly from government-led funds to help cushion the Taiex,” Mega International Investment Services Corp. analyst Alex Huang said.
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“However, tech heavyweights, and in particular semiconductor stocks, remained weak throughout the session, in the wake of the third-quarter results reported by U.S. tech companies,” Huang said. “The Taiex’s (2.05 percent) gain in the previous two sessions also paved the way for profit taking today.”
In addition, Huang said, market sentiment was bothered by concerns over cross-Taiwan Strait tensions, as Taipei is seen likely to face greater military threats from Beijing now that Chinese President Xi Jinping (習近平) is cementing his power with a third term.
“Geopolitical tensions remained a critical factor in other regional markets,” Huang said, noting that the Hong Kong equity market also fell Friday.
Tech stocks
On the Taiex, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) lost 1.56 percent to close at NT$379.50, but it came off a low of NT$375.00 on late session buying. TSMC’s losses contributed more than 50 points to the Taiex’s fall and led the electronics sector and semiconductor sub-index to drop 1.24 percent and 1.70 percent, respectively.
Among other semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, lost 2.42 percent to end at NT$38.30, dynamic random access memory (DRAM) Nanya Technology Corp. dropped 3.45 percent to close at NT$53.10, and smartphone IC designer MediaTek Inc. shed 4.07 percent to end at NT$565.00.
Bucking the downturn, TSMC’s application-specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. soared by the daily maximum 10 percent to close at NT$470.50, and Alchip Technologies Ltd., another ASIC designer, ended up 1.13 percent at NT$626.00.
In addition, IC packaging and testing services provider ASE Technology Holding Co. rose 2.54 percent to close at NT$80.70, after it reported on Thursday a strong third-quarter net profit, which soared 23 percent year-on-year and 9 percent from the previous quarter.
Meanwhile, telecom stocks, which are seen as a safe haven because of their stable dividend yields, appeared resilient, with Chunghwa Telecom Co. falling only 0.55 percent to close at NT$109.00, and Taiwan Mobile Co. ending unchanged at NT$94.30.
Non-tech sector
The steel index also weathered the downturn, recovering some of its early loses to close down 0.75 percent at 126.52, off a low of 125.16, and China Steel Corp., the largest steel maker in Taiwan, rose 0.37 percent to end at NT$27.15.
Late session buying also propped up the financial sector, which fell only 0.15 percent, with Fubon Financial Holding Co. rising 0.75 percent to close at NT$51.50, Mega Financial Holding Co. gaining 0.34 percent to end at NT$29.80, and E. Sun Financial Holding Co. closing up 0.22 percent at NT$23.15.
“The Fed is scheduled to kick off a two-day meeting next week, and many investors are nervous that it will stay hawkish on rate hikes,” Huang said. “That’s why even though the Taiex fell today, few were willing to buy the dips, which kept turnover low.”
According to the TWSE, foreign institutional investors sold a net NT$11.13 billion worth of shares on the main board Friday.
Source: Focus Taiwan News Channel