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Taiwan shares end flat after recouping earlier losses on TSMC gains

12/01/2023 06:59 PM
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CNA file photo
CNA file photo

Taipei, Dec. 1 (CNA) Shares in Taiwan closed little changed Friday after recovering from earlier losses, as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) recovered from its previous weakness, dealers said.

The entire electronics sector largely stayed in the doldrums as investors took their cue from the downturn suffered by tech stocks on U.S. markets overnight, while buying rotated to select old economy industries, providing support to the broader market, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 4.50 points, or 0.03 percent, at 17,438.35, after moving between 17,355.89 and 17,450.13. Turnover totaled NT$298.91 billion (US$9.51 billion).

The market opened down 11.50 points and soon fell to the day's low by about 80 points in the early morning session, led by the tech sector after a 0.79 percent fall on the Philadelphia Semiconductor Index and a 0.23 percent fall on the tech-heavy Nasdaq index on U.S. markets overnight, due to a spike in U.S. treasury yields at a time when the bond market saw profit taking, dealers said.

However, certain semiconductor heavyweights, in particular TSMC, regained their footing in the late trading session, to vault the broader market into positive territory at the end of trading, dealers added.

Ample liquidity

"Despite the initial fall, the main board still received support from ample liquidity which prevented the Taiex from falling further," Moore Securities Investment Consulting Co. analyst Adam Lin said.

"As many investors at home and abroad widely anticipate the rate hike cycle by the U.S. Federal Reserve is coming to an end amid moderating inflation, foreign institutional investors have kept moving funds into the region," Lin said, referring to the October personal consumption expenditures price index -- one of the Fed's favorite inflation gauges -- rising 3.5 percent on a year-over-year basis, a drop from a 3.7 percent annual gain in September.

"We saw TSMC quickly emerging from its earlier weakness, helping the Taiex trim its losses," Lin said. "The Taiex has strong technical support at around 17,320 points, the 10-day moving average."

TSMC, the most heavily weighted stock on the local market, rose 0.35 percent to close at NT$579.00 after hitting a low of NT$573.00. Led by TSMC, the electronics index and semiconductor sub-index recovered from their losses and rose 0.18 percent and 0.30 percent, respectively.

Among other major semiconductor stocks, smartphone IC designer MediaTek Inc. gained 0.21 percent to end at NT$947.00, off a low of NT$938.00, while IC packaging and testing services provider ASE Technology Holding Co. closed unchanged at NT$128.00.

In addition, shares in United Microelectronics Corp., a smaller contract chipmaker, rose 1.21 percent to end at NT$49.70, while Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) subsidiary, lost 1.21 percent to close at NT$1,630.00.

After U.S.-based AI chip designer Nvidia Corp. fell 2.85 percent overnight, Taiwan's AI related stocks largely trended lower with AI server maker Quanta Computer Inc. losing 1.48 percent to end at NT$200.00, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, falling 1.60 percent to close at NT$246.00. In addition, LITE-ON Technology Corp., a maker of power management solutions for AI server use, shedding 1.82 percent to end at NT$108.00.

"Also due to ample liquidity, buying rotated to some old economy industries, such as shipping stocks," Lin said.

Old economy industries

The transportation industry rose 1.82 percent with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rising 2.23 percent to close at NT$114.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Inc. gaining 3.10 percent and 4.18 percent, respectively, to end at NT$43.30 and NT$48.65 on the back of a rebound in freight rates.

Rotational buying also spread to the biotech industry, which rose 0.85 percent, due to a surge in respiratory illnesses in China, Chen said.

Oncology and specialty generics drug developer Lotus Pharmaceutical Co. rose 3.48 percent to close at NT$267.50, and drug brand China Chemical & Pharmaceutical Co. gained 4.05 percent to end at NT$25.70. In addition, Sinphar Pharmaceutical Co., also a drug developer, added 1.65 percent to close at NT$33.90, and test kit supplier Panion & BF Biotech Inc. ended up 0.86 percent at NT$117.00.

The financial sector, lost 0.85 percent as investors locked in gains posted in the late trading session Thursday in the wake of index adjustments by MSCI Inc. Mega Financial Holding Co. fell 2.15 percent to close at NT$38.65 and CTBC Financial Holding Co. lost 1.26 percent to end at NT$27.35.

"Fed Chair Jerome Powell will speak Friday. It is worth watching for a better guess about what the American central bank will do next with its monetary policy," Lin said.

According to the TWSE, foreign institutional investors bought a net NT$1.24 billion worth of shares on the main board Friday.

(By Frances Huang)

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