Taiwan shares end lower as TSMC closes at below NT$400

Taipei, Oct. 19 (CNA) The Taiwan Stock Exchange's (TWSE) main index reversed gains from one session earlier to fall below the 13,000-point mark Wednesday on the back of futures-led selling throughout the session despite rises on the U.S. markets overnight, dealers said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) fell below NT$400.00 (US$12.50) again as institutional investors dumped the stock in the spot market in a bid to profit in futures trading, dealers added.

The Taiex, the weighted index on the TWSE, ended down by 147.92 points, or 1.13 percent, at the day's low of 12,976.76 after coming off a high of 13,155.62. Turnover totaled NT$184.076 billion (US$5.75 billion).

The market opened down by 0.22 percent and moved in a narrow range in the early morning session as investors here ignored a 1.12-percent rise in the Dow Jones Industrial Average and a 0.90-percent rise in the tech-heavy Nasdaq index overnight, dealers said.

Selling in TSMC started escalating in the mid-morning session and then spread to other semiconductor stocks, pushing the Taiex below 13,000 points by the end of the session, while some bargain hunters lent support to select old economy and financial stocks, dealers added.

Future-led sell-off

"Today was a futures-led sell-off where institutional investors simply cut their holdings in the spot market in a bid to profit in the futures market, where the October contracts expired on the same day," Concord Capital Management Corp. analyst Lu Chin-wei said.

"As the most heavily weighted stock in the market, TSMC was affected by being sold off by those who held large short position contracts in the futures market, and fell below NT$400 again today," Lu said.

After a 1.82-percent fall in its American depositary receipts on the U.S. markets Tuesday, TSMC decreased by 2.83 percent to reach NT$395.50 on the local main board Wednesday, contributing about 100 points to the Taiex's fall. Its losses also caused the bellwether electronics sector and semiconductor sub-index to move lower by 1.57 percent and 2.36 percent, respectively.

"TSMC is forecast by the market to rake in NT$37-38 in earnings per share in 2023 and the recent falls of its share price have made the stock cheap," Lu said. "But, the stock still remains affected by fund flight."

Othe tech stocks

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. fell by 1.87 percent to end at NT$577.00, and United Microelectronics Corp., a smaller contract chipmaker, dipped by 0.13 percent to close at NT$38.20, while Powerchip Semiconductor Manufacturing Corp., another smaller contract chipmaker, ended unchanged at NT$29.90.

Bucking the downturn, TSMC's application-specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. rose by 2.06 percent to close at NT$421.50, and Alchip Technologies Ltd., another ASIC designer, ended up by 3.13 percent at NT$692.00.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. dipped by 0.48 percent to close at NT$105.00, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose by 0.85 percent to end at NT$1,780.00.

"Compared with the entire electronics sector, select flat-panel makers appeared resilient. I suspect government-led funds were among their purchasers in order to provide support," Lu said.

Innolux Corp., a leading screen supplier, rose by 1.54 percent to close at NT$13.20 at a time when TV screen prices stabilized, while rival AU Optronics Corp. fell by 0.27 percent to end at NT$18.15, but came off a low of NT$17.65.

"Government support was also seen for some old economy and financial stocks in an attempt to prevent a further fall in the Taiex," Lu said.

Outside tech sector

Among the raw material heavyweights which saw gains, China Steel Corp., the largest steelmaker in Taiwan, rose by 0.92 percent to close at NT$27.45, and Tung Ho Steel Enterprise Corp. increased by 3.61 percent to end at NT$54.60. In addition, Taiwan Cement Corp. rose by 0.48 percent to close at NT$31.60, and Asia Cement Corp. edged up by 0.16 percent to end at NT$37.95.

The transportation sector, which also outperformed the Taiex, rose by 0.77 percent, with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, increasing by 2.13 percent to close at NT$144.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. rising by 1.78 percent and 1.34 percent, respectively, to end at NT$63.00 and NT$67.90.

In the financial sector, Cathay Financial Holding Co. rose by 0.39 percent to close at NT$38.30, while Fubon Financial Holding Co. dipped by 0.20 percent to end at NT$50.40, but came off a low of NT$50.00.

"Today's turnover stayed low so I think more selling will emerge soon with the Taiex likely to test the nearest technical support ahead of 12,809 points, the intraday low on Oct. 13," Lu said. "Government support might possibly come to the rescue then."

According to the TWSE, foreign institutional investors sold a net NT$12.13 billion worth of shares on the main board on Wednesday.

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