Taiwan shares end slightly down ahead of U.S. inflation data

Taipei, April 10 (CNA) Shares in Taiwan closed slightly lower Wednesday after moving in a narrow range throughout the trading session amid caution ahead of the release of the U.S. inflation data later in the day, dealers said.

While the bellwether electronics sector largely traded in the doldrums, buying rotated to select old economy stocks, such as the biotech and construction industries, which played catch-up with their tech counterparts, dealers added.

The Taiex, the weighted index of the Taiwan Stock Exchange (TWSE), ended down 32.67 points, or 0.16 percent, at the day's low of 20,763.53 after hitting a high of 20,883.69. Turnover totaled NT$425.35 billion (US$13.30 billion).

In the wake of the mixed U.S. markets, where the Dow Jones Industrial lost 0.02 percent and the tech-heavy Nasdaq Index rose 0.32 percent overnight, the local market opened down 6.78 points and continued to fluctuate narrowly for the rest of the session with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) moving in a seesaw manner after a 4.60 percent rally on Tuesday.

With TSMC falling back from its day's high to negative territory by the end of the session, the broader market edged lower at the end after hitting a historic intraday high.

"Sentiment was cautious at home and abroad before the U.S. March consumer price index (CPI) is due later in the day," Mega International Investment Services Corp. analyst Alex Huang said.

"Amid uncertainty over the timing for the Federal Reserve to cut interest rates, the inflation data appears particularly critical," Huang said.

The Fed has planned a two-day policymaking meeting, which will open on April 30, after leaving its key interest rates unchanged in the previous meeting held in mid-March.

"In addition, after the Taiex closed at a record high yesterday, many investors preferred to take a pause now amid fears over a major technical pullback," Huang said. "TSMC, which served as the major driver to the strong gains yesterday, suffered mild profit taking and prevented the broader market from ending higher."

TSMC fell 0.49 percent to close at NT$815.00 after coming off a high of NT$819.00. TSMC's losses contributed about 32 points to a fall in the Taiex.

On Tuesday, TSMC hit a closing high of NT$819.00 as investors had expected the chipmaker would report strong sales for the first quarter of this year. After the market closed on Wednesday, TSMC said it posted a record first-quarter consolidated sales total of NT$592.64 billion.

While TSMC traded in weakness, other semiconductor stocks attracted rotational buying with United Microelectronics Corp., a smaller contract chipmaker, up 1.53 percent to end at NT$53.20, IC packaging and testing services provider ASE Technology Holding Co. up 1.60 percent to close at NT$158.50, and smartphone IC designer MediaTek Inc. up 3.02 percent to end at NT$1,195.00.

Buying also rotated to smaller cap electronics distributors as they had lagged behind tech heavyweights for some time, Huang said. Among them, electronics component retailer and wholesaler WT Microelectronics Co. surged 10 percent, the maximum daily increase, to close at NT$149.00, and electronics component and equipment distributor Weikeng Industrial Co. gained 4.79 percent to end at NT$33.90.

On the other hand, tech stocks related to artificial intelligence development continued to come under pressure with AI server maker Quanta Computer Inc. falling 1.74 percent to close at NT$282.00, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, losing 4.48 percent to end at NT$320.00.

"Select old economy industries also tried to catch up with the electronics sector as the market spotlight focused on biotech stocks due to their relatively low valuations," Huang said. "Construction stocks also outperformed the Taiex on the back of their attractive dividend yields."

In the biotech industry, which rose 1.79 percent, intra-articular injection maker Maxigen Biotech Inc. added 2.10 percent to close at NT$46.10, and drug developer ScinoPharm Taiwan, Ltd. gained 3.24 percent to end at NT$28.70.

In the construction industry, which rose 1.20 percent, Cathay Real Estate Development Co. and Pacific Construction Co. surged 10 percent to close at NT$27.35 and NT$11.60, respectively, and JSL Construction & Development Co. ended up 2.74 percent to end at NT$112.50.

The financial sector fell 0.36 percent with Cathay Financial Holding Co. down 1.42 percent to close at NT$48.75 and Fubon Financial Holding Co. down 1.14 percent to end at NT$69.20.

According to the TWSE, foreign institutional investors sold a net NT$241.18 million worth of shares on the main board Wednesday.