Taiwan shares stage mild rebound after plunging on previous day

Shares in Taiwan staged a mild technical rebound on Tuesday after a slump in the previous daily session as investors ignored the losses suffered by the U.S. markets overnight, dealers said.

However, turnover remained low as investors appeared reluctant to chase prices amid concerns that the U.S. Federal Reserve will continue an aggressive approach to carry out rate hikes to rein in inflation, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up by 27.44 points, or 0.18 percent, at 14,953.63, after moving between 14,911,97 and 15,027.50. Turnover totaled NT$183.07 billion (US$6.01 billion).

The market opened down by 6.50 points on follow-through selling from a session earlier, when the Taiex tumbled by 2.31 percent, but soon regained its footing and moved higher to breach the 15,000-point mark at one point in the afternoon session as investors ignored an extended 0.57-percent decline on the Dow Jones Industrial Average overnight, dealers said.

Stiff technical resistance then emerged, forcing the main board to lose part of its earlier gains and fall below 15,000 points by the end of the day as large-cap semiconductor stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), moved in consolidation, dealers added.

“Compared to the U.S. markets, the Taiwan market showed resilience in bouncing back after Monday’s plunge,” Mega International Investment Services Corp. analyst Alex Huang said. “Still, it was not easy to jump over the high technical hurdles ahead of 15,000 points for the moment.”

Huang said that interest to trade remained low as many investors stayed on the sidelines after Fed Chair Jerome Powell said at the American central bank’s annual economic symposium in Jackson Hole last Friday that the bank would maintain a rate hike cycle until it was confident the job to dampen inflation was done.

“Powell’s remarks dashed market hopes that the Fed would take a softer approach soon and a hawkish stance towards raising interest rates is likely to put the U.S. economy in a hard landing,” Huang said.

Amid fears that rising interest rates will dwarf tech stocks’ dividend yields, TSMC, the most heavily weighted stock in the local market, fell by 0.50 percent to close at NT$496.00 after hitting a high of NT$500.00, where there was stiff technical resistance. On Monday, TSMC had plunged by 2.64 percent.

Among other large-cap semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, rose by 1.13 percent to end at NT$40.40, and smartphone IC designer MediaTek Inc. edged up by 0.61 percent to close at NT$657.00. But, application-specific IC (ASIC) designer Alchip Technologies Ltd. fell by 0.80 percent to end at NT$866.00, and display driver IC designer Novatek Microelectronics Corp. dipped by 0.19 percent to close at NT$258.50.

“While semiconductor stocks appeared mixed, bargain hunters focused on the optoelectronics industry to give a boost to the bellwether electronics sector,” Huang said.

With the optoelectronics sub-index up by 2.62 percent, flat-panel makers AU Optronics Corp. and Innolux Corp. soared by 4.13 percent and 3.02 percent, respectively, to end at NT$16.40 and NT$11.95 as prices of TV panels showed signs of stabilizing.

In addition, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose by 2.64 percent to close at NT$1,945.00, and rival Genius Electronic Optical Co. even soared by 5.98 percent to end at NT$434.50 ahead of Apple’s launch of the iPhone 14, expected in September.

Huang said the biotech sector attracted rotational buying throughout the session, rising by 1.13 percent.

Among the rising biotech stocks, supplement food Grape King Bio Ltd. rose by 3.93 percent to close at NT$145.50, medical equipment supplier Maxigen Biotech Inc. rose by 3.45 percent to end at NT$44.95, test kit brand Panion & BF Biotech Inc. increased by 2.01 percent to close at NT$152.00, and drug developer China Chemical & Pharmaceutical Co. ended up by 1.84 percent at NT$61.00.

Boosted by higher crude oil prices, Asia Polymer Corp. rose by 1.11 percent to close at NT$27.30, and polyethylene producer USI Corp. increased by 1.07 percent to end at NT$23.70.

The financial sector underperformed the broader market, down by 0.41 percent, with Cathay Financial Holding Co. falling by 2.52 percent to close at NT$44.45, and Fubon Financial Holding Co. dipping by 0.52 percent to end at NT$457.30.

“Investors had better pay close attention to the August U.S. job data due Friday for more clues about the Fed’s policy,” Huang said.

Despite the rebound in the Taiex, foreign institutional investors sold a net NT$18.47 billion worth of shares on the main board Tuesday, according to the TWSE.

Source: Focus Taiwan News Channel