Taiwan shares end lower on U.S. losses

After fluctuating during the day, shares in Taiwan extended losses from a session earlier to close lower on Wednesday in the wake of losses suffered by the U.S. markets overnight, dealers said.

The bellwether electronics sector, again, led the broader market in trending lower as the late trading session, in particular, pushed down large-cap semiconductor stocks, while the financial sector bucked the downturn, providing some support to the local main board, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down by 98.87 points, or 0.67 percent, at the day’s low of 14,630.01, after coming off a high of 14,823.15. Turnover totaled NT$246.8 billion (US$8.05 billion).

The market opened down by 0.14 percent on follow-through selling from a session earlier, when the Taiex fell by 1.68 percent, but soon regained its footing to hit the day’s high in the mid-morning session. Selling then reemerged, focusing on the semiconductor industry, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), in the late trading session, sending the Taiex to the lowest level at the end of the day, dealers said.

U.S. rate hike concerns

The sell-off among the local electronics stocks reflected a 2.0-percent fall on the tech-heavy Nasdaq index on the U.S. markets amid renewed concerns over a rate hike by the U.S. Federal Reserve in its policymaking meeting scheduled for Dec. 13-14, after recent better-than-expected economic data in Washington, dealers added.

“After the U.S. November job data came out Friday, investors at home and abroad started to feel wary. They fear that a stronger-than-expected U.S. job market will prompt the Fed to act aggressively,” Concord Securities analyst Kerry Huang said. “Market sentiment has turned cautious here after the Taiex staged a rally in recent sessions, leading to investors pocketing their gains with semiconductor heavyweights being the most affected by such caution.”

“Judging from the movement, I think the local main board still faces stiff technical resistance as it moves closer to the 15,000-point mark,” he said.

TSMC, tech stocks

The electronics sector fell by 1.13 percent to close at the day’s low of 677.26 with the semiconductor sub-index falling by 0.97 percent at the day’s low of 319.90 after TSMC, the most heavily weighted stock in the local market, fell by 0.63 percent to end at NT$475, off a high of NT$485.50 in last-ditch selling.

TSMC announced Tuesday it would expand its Arizona plants by increasing its investment to US$40 billion from the original US$12 billion to build a second fab using the more advanced 3-nanometer process to produce chips in 2026, following the first fab, which is still under construction with mass production scheduled for 2024.

Among other semiconductor stocks, Global Unichip Corp., TSMC’s application-specific integrated circuit (ASIC) design subsidiary, fell by 2.88 percent to end at NT$742.00 and United Microelectronics Corp. (UMC), a smaller contract chipmaker, dropped by 1.91 percent to close at NT$43.65. But, UMC’s application-specific integrated circuit (ASIC) design unit Novatek Microelectronics Corp. rose by 2.18 percent to end at NT$305.00.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. fell by 0.97 percent and its wireless connection device subsidiary Pan-International Industrial Corp. tumbled by 5.52 percent to end at NT$38.50.

Financial sector

“The financial sector attracted rotational buying, led by CTBC Financial Holding Co., but its gains failed to reverse the losses from the tech sector,” Huang said.

In the financial sector, which rose by 0.80 percent, CTBC Financial rose by 2.90 percent to close at NT$23.05, Shanghai Commercial & Savings Bank gained by 2.35 percent to end at NT$47.90, and E. Sun Financial Holding Co. rose by 0.83 percent to close at NT$24.40. Bucking the upturn, Fubon Financial Holding Co. dipped by 0.34 percent to end at NT$58.20.

While the tech sector showed some weakness, buying also rotated to select old economy stocks, Huang said.

Among these, food brand Uni-President Enterprises Corp. rose by 0.93 percent to close at NT$65.20, and rival Wei Chuan Foods Corp. edged by 0.53 percent to end at NT$19.05. In addition, Taiwan Cement Corp. edged up by 0.15 percent to close at NT$33.35, while Asia Cement Corp. fell by 0.85 percent to end at NT$40.90.

In the biotech sector, drug developer China Chemical & Pharmaceutical Co. rose by 1.43 percent to close at NT$21.35, and rival Sinphar Pharmaceutical Co. rose by 3.92 percent to end at NT$31.80.

“Despite the ceiling at around 15,000, the Taiex could see some short-term support ahead of 14,573 points, the 20-day moving average,” Huang said.

According to the TWSE, foreign institutional investors sold a net NT$4.07 billion worth of shares on the local main board on Wednesday.

Source: Focus Taiwan News Channel