Shares in Taiwan recouped early losses to close higher Wednesday, with trading buoyed by Taiwan Semiconductor Manufacturing Co.’s (TSMC) mid-session announcement it would not be cutting its first-quarter sales forecast.
The Taiex, the Taiwan Stock Exchange’s (TWSE) weighted index, ended up 94.70 points, or 0.61 percent, at 15,598.49 after moving between 15,387.38 and 15,617.03. Turnover totaled NT$251.51 billion (US$8.22 billion).
TSMC
The market opened down 0.44 percent as TSMC came under pressure following reports that the chipmaker was unlikely to realize its first-quarter sales guidance due to a major cut in client orders.
As the selling of TSMC and other tech stocks continued to push down the Taiex, which dipped below the 15,400-point mark at one point, an announcement from the chipmaker that it had left its first-quarter sales forecast unchanged led to an upswing for semiconductors stocks and the broader market.
“TSMC’s clarification boosted market sentiment so that the stock staged a rebound, leading theTaiex to move higher,” Mega International Investment Services Corp. analyst Alex Huang said. “In addition, the Taiex saw strong technical support at around 15,400 points, the lowest level in consolidation in recent two weeks, to prompt investors to haunt bargains.”
TSMC, the most heavily weighted stock in the local market, rose 2.15 percent to close at the day’s high of NT$522.00 after coming off a low of NT$504.00. The chipmaker’s gains pushed up the electronics sector and the semiconductor sub-index by 1.55 percent and 2.38 percent, respectively, and contributed more than 90 points to the Taiex’s rise Wednesday.
The local media reported earlier Wednesday that TSMC’s five major clients — U.S.-based Advanced Micro Devices, Inc. (AMD), Nvidia Corp., Qualcomm Inc. and Intel Corp. and Taiwan’s MediaTek Inc., — have aggressively scaled back their orders as inventory adjustments have been more serious than expected, so the Taiwanese chipmaker could see its first-quarter sales falling more than 17 percent from a quarter earlier in U.S. dollar terms.
In response, TSMC said it had left first-quarter sales guidance issued in mid-January unchanged.
According to TSMC’s January forecast, the chipmaker expects revenue range between US$16.7 billion and US$17.5 billion, with the median figure at US$17.1 billion, down 14.2 percent sequentially, due to inventory adjustments caused by weakening demand.
“Technically speaking, the initial losses of TSMC shares today allowed the stock to come closer to the nearest support ahead of the 240-day moving average of around NT$497.00, and that was also a factor in the rebound,” Huang said.
TSMC’s buying spread to other semiconductor stocks, with United Microelectronics Corp. (UMC), a smaller contract chipmaker, up 2.70 percent to end at NT$51.30, UMC’s display drive IC subsidiary Novatek Microelectronics Corp. up 1.96 percent to close at NT$415.50, and TSMC’s application specific integrated circuit (ASIC) design subsidiary up 1.72 percent to end at NT$1,180.00.
In addition, smartphone IC designer MediaTek Inc. soared 9.41 percent to close at NT$791.00 after the company announced a proposal to issue NT$76.00 in cash dividend per share for its 2022 earnings, while IC packaging and testing services provider ASE Technology Holding Co. ended unchanged at NT$106.00.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.99 percent to close at NT$102.00, but Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., shed 1.81 percent to end at NT$2,165.00.
Old economy and financial stocks
“As the tech sector attracted most of market attention by drawing almost 60 percent of the total turnover today, old economy and financial stocks were largely moved marginalized,” Huang said.
The transportation sector fell 1.14 percent as investors locked in their profits recently built on a recent rebound in the Baltic Dry Index (BDI), which gauges the freight fares of bulk cargo shippers, Huang said.
Among bulk cargo shippers, U-Ming Marine Transport Corp. lost 5.90 percent to close at NT$57.40, and Tze Shin International Co. fell 2.99 percent to end at NT$14.60. In addition, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, closed down 0.64 percent at NT$156.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. shed 1.24 percent and 1.26 percent, respectively, to end at NT$63.80 and NT$78.60.
The tourism sector fell 0.78 percent, with FarGlory Hotel Co. down 5.67 percent to close at NT$35.75 and rival Chateau International Development Co. down 4.75 percent to end at NT$45.15. Bucking the downturn, My Humble House Hospitality Management Consulting gained 0.93 percent to close at NT$54.50, and Formosa International Hotels Corp. added 0.48 percent to end at NT$314.00.
In the financial sector, which lost 0.61 percent, Fubon Financial Holding Co. dropped 1.67 percent to close at NT$59.00, and Cathay Financial Holding Co. ended down 1.61 percent at NT$42.75.
“Investors should keep a close eye on the movement of the U.S. dollar, which has been on the rise on expectations of the Federal Reserve’s rate hikes,” Huang said. “A rising greenback could prompt foreign institutional investors to move more funds out of the country and depleting liquidity is the last thing the stock market wants to have.”
According to the TWSE, foreign institutional investors sold a net NT$4.52 billion worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel