Taiwan shares end lower after hitting intraday high

Taipei, March 26 (CNA) Shares in Taiwan closed lower Tuesday after hitting an all-time intraday high as investors became wary of a major technical pullback from recent strong gains, dealers said.

Amid the profit-taking, contract chipmaker Taiwan Semiconductor Manufacturing Co, (TSMC), served as an anchor to prevent the broader market from falling further by the end of the session, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended down 65.76 points, or 0.33 percent, at 20,126.49 after moving between 19,977.40 and 20,397.07. Turnover totaled NT$482.698 billion (US$15.17 billion).

The market opened up 16.63 points and buying continued despite weakness on American markets overnight, pushing the Taiex up 204 points to the day's high before 9:30 a.m., dealers said.

Selling soon followed, however, sending the Taiex below 20,000 points, before rebounding, largely due to interest in TSMC, dealers said.

"Since the Taiex breached 20,000 points and ended above that level (last week), it has appeared expensive," Mega International Investment Services Corp. analyst Alex Huang said, referring to a record high price to book value multiple of about 2.4.

"So there were growing concerns about a major possible correction, with many investors simply pocketing their gains," Huang said.

TSMC's strength late in the session lent support to the broader market. It closed 0.26 percent higher at NT$782.00, off a low of NT$776.00, helping the semiconductor sub-index end only 0.04 percent lower, and limiting the electronics index's fall to 0.59 percent.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. rose 0.89 percent to end at NT$1,130.00 after hitting a low of NT$1,120.00, while IC packaging and testing services provider ASE Technology Holding Co. lost 0.32 percent to close at NT$157.00.

United Microelectronics Corp., a smaller contract chipmaker, ended down 0.19 percent at NT$51.70.

"Tech stocks related to artificial intelligence development came under pressure throughout the session, also due to their relatively high valuations," Huang said.

AI server maker Quanta Computer Inc. fell 0.39 percent to close at NT$254.00, and rival Wistron Corp., affected by a factory fire, shed 4.10 percent to end at NT$117.00.

A Wistron factory in the Hsinchu Science Park caught fire late Monday night, but the company said Tuesday that its production was only slightly affected by the incident.

Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co., lost 2.41 percent to close at NT$142.00, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., ended down 1.02 percent at NT$2,430.00.

"Profit-taking also spread to the old economy sector," Huang said.

The transportation index lost 1.67 percent, with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, falling 1.15 percent to close at NT$171.50.

Rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. dropped 3.18 percent and 1.87 percent, respectively, to end at NT$44.15 and NT$44.55.

Elsewhere in the old economy sector, Chung Hung Steel Corp. lost 1.35 percent to close at NT$21.90, while China Steel Corp., the largest steel brand in Taiwan, ended up 0.63 percent at NT$24.00.

Riding the wave of large orders from state-owned Taiwan Power Co. to strengthen the resilience of power grid networks around Taiwan, Shihlin Electric & Engineering Corp. soared 7.02 percent to close at NT$320.00 and Chung-Hsin Electric & Machinery Manufacturing Corp. rose 1.08 percent to end at NT$187.00.

In the financial sector, which rose 0.67 percent, Fubon Financial Holding Co. gained 0.87 percent to close at NT$69.60, and Cathay Financial Holding Co. ended up 0.52 percent at NT$48.35.

"Investors should keep a close eye on U.S. economic data due later this week to get a better idea of what the Federal Reserve will do next to adjust its monetary policy," Huang said.

Washington is scheduled to release fourth quarter economic growth data on Thursday and the February personal consumption expenditure (PEC) report on Friday.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$5.43 billion in shares on the market Tuesday.