Taiwan shares end slightly higher on moderate turnover

08/19/2022 05:46 PM
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CNA file photo
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Taipei, Aug. 19 (CNA) Shares in Taiwan closed slightly higher Friday as the tech sector struggled to recover its earlier losses, while old economy and financial stocks were largely mixed in the wake of a narrow range of movement on U.S. markets overnight, dealers said.

Turnover remained moderate with many investors preferring to take to the sidelines, showing their reluctance to chase prices for the moment amid caution over the rate hike cycle launched by the U.S. Federal Reserve, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 12.02 points, or 0.08 percent, at 15,408.78, after moving between 15,346.26 and 15,458.45. Turnover totaled NT$218.66 billion (US$7.28 billion).

The market opened down 2.40 points and fell by more than 60 points to the day's low in the early morning session on follow-through selling from a session earlier, when the Taiex lost 0.44 percent, dealers said.

After 10 a.m., bargain hunters started to pick up large-cap semiconductor stocks, helping the Taiex recoup its earlier losses and trade in positive territory, but the gains were capped by the end of the session amid concerns over an aggressive Fed, dealers added.

U.S. Fed meeting

In the minutes of the last policymaking meeting in July released Wednesday, the Fed said it is determined to continue rates hikes until inflation eases substantially but it could adjust the pace of its tightening based on market conditions.

"There is no doubt that the rate hike cycle will continue, which will support the U.S. dollar and lead to funds exiting from the region," Concord Securities analyst Kerry Huang said. "Under such circumstances, foreign institutional investors are expected to keep away from the local main board, which is expected to make local investors wary."

"Today, the Taiex continued to move in consolidation, with the tech sector trying to recover from its earlier weakness. Without any meaningful expansion in turnover, however, the efforts were limited," Huang added.

Tech stocks

The electronics sector rose 0.17 percent to close at 717.88, off a low of 715.26 as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) failed to maintain the strength of its technical rebound, falling 0.19 percent to end at NT$519.00 after fluctuating between NT$517.00 and NT$523.00.

Among other major semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, rose 1.18 percent to close at NT$43.00 after hitting a low of NT$42.50, and IC packaging and testing services provider ASE Technology Holding Co. gained 0.67 percent to end at NT$90.00 after coming off a low of NT$89.10.

In addition, dynamic random access memory (DRAM) chipmaker Nanya Technology Corp. rose 1.31 percent to close at NT$54.30, but smartphone IC designer MediaTek Inc. lost 1.28 percent to end at NT$693.00.

Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co., lost 0.89 percent to close at NT$111.00, while Yageo Corp, the world's third largest multi-layer ceramic capacitor (MLCC) supplier, rose 1.37 percent to end at NT$332.00.

Outside tech sector

"Trading in non-tech stocks also remained quiet throughout the session with the exception of select biotech stocks due to rotational buying," Huang said.

Among the gaining biotech stocks, drug developer China Chemical & Pharmaceutical Co. rose 1.16 percent to close at NT$21.85, and test kit supplier Panion & BF Biotech Inc. gained 1.34 percent to end at NT$151.00, but Huang said their small weighting failed to boost the broader market.

Elsewhere in the old economy sector, China Steel Structure Corp. lost 1.17 percent to close at NT$59.00, Tung Ho Steel Enterprise Corp. fell 0.91 percent to end at NT$54.30, and Chung Hung Steel Corp. shed 0.54 percent to close at NT$27.55. China Steel Corp., the largest steel maker in Taiwan, ended unchanged at NT$29.20.

In addition, Formosa Plastics Corp. rose 0.11 percent to close at NT$94.30, and Nan Ya Plastics Corp. gained 0.57 percent to end at NT$71.00, while Evergreen Marine Corp., Taiwan's largest container cargo shipper, rose 0.20 percent to close at NT$98.00, but rivals Wan Hai Lines Ltd. and Yang Ming Marine Transport Corp. fell 0.50 percent and 0.12 percent, respectively, to end at NT$100.50 and NT$86.40.

Upcoming data to look

"Before the Fed holds its next meeting (Sept. 20-21), investors should keep alert for upcoming economic data and more clues about what the American central bank will do. The nearest critical data will be personal consumption expenditure (PCE) price index due on Aug. 26," Huang said.

According to the TWSE, foreign institutional investors continued to stay on the sell side, registering net sales of NT$7.31 billion worth of shares on the main board Friday after net sales of NT$7.34 billion on Thursday.

(By Frances Huang)

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