Shares in Taiwan extended losses from a week earlier, falling more than 100 points Monday, as investors took their cue from heavy losses suffered by semiconductor stocks on the United States markets at the end of last week, dealers said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, kept moving lower, causing the broader market to fall and move closer to the 14,200 point mark at the end of the session, at a time when market sentiment remains roiled by fears over growing inflation and a rate hike cycle worldwide, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 126.02 points, or 0.88 percent, at 14,217.06, after moving between 14,167.10 and 14,412.47. Turnover totaled NT$231.89 billion (US$7.78 billion).
The market opened down 0.73 percent on follow-through selling from Friday, when the Taiex dropped 3.26 percent, rising slightly above the previous closing level at one point in the mid-morning session, dealers said.
However, selling set in again, as TSMC continued to come under pressure in the wake of a 3.83 percent plunge on the Philadelphia Semiconductor Index in the U.S. overnight.
Meanwhile, select old economy stocks rode a wave of bargain hunting that offset the weakness of tech stocks after the Dow Jones Industrial Average and the S&P 500 index rose 1.05 percent and 1.06 percent, respectively, on Friday, dealers said.
“After the sell-off on the Taiex last week, market confidence has become fragile,” Cathay Futures Consultant analyst Tsai Ming-han said.
Last week, the local main board shed 960.24 points or 6.27 percent as foreign institutional investors registered net sales of NT$40.05 billion worth of shares on the main board.
“Concerns over growing inflation and fears over a hawkish U.S. Federal Reserve (Fed) continue to bother investors,” Tsai said. “So, they simply rushed to cut their holdings in TSMC further in response to the latest steep fall on the Philadelphia Semiconductor Index.”
Following a 5.81 percent tumble in its American depositary receipts (ADRs) on Friday, TSMC lost 2.98 percent to close at the day’s low of NT$440.00.
TSMC’s losses contributed about 110 points to the Taiex’s losses, and led the bellwether electronics sector and the semiconductor sub-index to move lower by 1.67 percent and 2.19 percent, respectively.
Other semiconductor stocks were mixed. Among them, United Microelectronics Corp., a smaller contract chipmaker, rose 0.26 percent to end at NT$38.15, off a low of NT$37.50, while smartphone IC designer MediaTek Inc. lost 0.16 percent to close at NT$616.00.
IC packaging and testing services provider ASE Technology Holding Co. dropped 0.67 percent to end at NT$74.00.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 0.99 percent to close at NT$100.00, but its metal casing subsidiary Foxconn Technology Co. rose 0.88 percent to end at NT$45.70.
Rebounding from a recent slump, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., gained 2.66 percent to close at NT$1,735.00, and flat panel brand AU Optronics Corp. rose 2.85 percent to end at NT$14.45.
The financial sector also came under pressure, falling 1.08 percent and adding more losses to the broader market, Tsai said.
In the sector, Cathay Financial Holding Co. shed 1.52 percent to close at NT$45.50, CTBC Financial Holding Co. lost 1.22 percent to end at NT$24.30, and Fubon Financial Holding Co. fell 0.69 percent to close at NT$57.90, while Mega Financial Holding Co. gained 1.42 percent to end at NT$35.75.
“While the tech and financial sectors stayed weak today, bargain hunters rushed to pick up stocks in select old economy stocks by using the rebounding Dow and the S&P 500 index as a reason to buy on Friday,” Tsai said.
Among rising old economy stocks, container cargo shippers attracted bargain hunting, boosting the transportation sector by 2.54 percent.
Among them, shares in Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 3.38 percent to close at NT$82.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. grew 0.51 percent and 4.05 percent, respectively, to end at NT$78.20 and NT$115.50.
Airline stocks also bucked the downturn on the Taiex, with China Airlines up 2.05 percent to close at NT$22.45 and EVA Airways up 4.37 percent to end at NT$31.05 on hopes the government will ease border controls soon.
Elsewhere in the old economy sector, animal feedstuff maker Great Wall Enterprise Co. rose 2.75 percent to close at NT$48.65, and food brand Uni-President Enterprises Corp. gained 0.15 percent to end at NT$68.00.
Meanwhile, textile maker Far Eastern New Century Corp. gained 2.73 percent to close at NT$32.00, and Eclat Textile Co. grew 1.11 percent to end at NT$410.00.
“After recent heavy losses, I expect TSMC will stage a technical rebound soon and so will the Taiex,” Tsai said. “However, the gains will be just technical in nature and could be short-lived as worries about moderating global economic growth amid rate increases are expected to affect equity prices in the longer term.”
According to the TWSE, foreign institutional investors sold a net NT$6.58 billion worth of shares on the main board Monday.
Source: Focus Taiwan News Channel