Taiwan shares end slightly lower, led by non-tech stocks

Taipei, May 21 (CNA) Shares in Taiwan closed slightly lower Tuesday with financial and old economy industries spotlighted amid selling, sparked by a negative response from China to President Lai Ching-te's (賴清德) inauguration address a day earlier, dealers said.

However, the bellwether electronics sector stayed resilient, stabilizing the broader market on the back of gains posted by tech stocks on U.S. markets overnight, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 34.88 points, or 0.16 percent, at 21,236.75 after moving between 21,131.62 and 21,307.08. Turnover totaled NT$373.10 billion (US$11.54 billion).

The market opened down 0.15 percent as investors locked in their gains built in recent sessions with financial and old economy heavyweights in focus after China's Taiwan Affairs Office blasted Lai's inauguration speech for "stubbornly insisting on the position of Taiwanese independence," dealers said.

However, large cap electronics stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) attracted rotational buying in the wake of the all-time high hit by the tech-heavy Nasdaq index overnight, which prevented the Taiex from falling further by the end of the session, dealers added.

"The response from Chinese authorities to Lai's speech deepened worries over cross-strait ties and triggered selling on the local stock market with large cap non-tech stocks highlighted today," Moore Securities Investment Consulting analyst Adam Lin said.

In his speech, Lai called on Beijing to recognize the existence of the Republic of China (Taiwan's formal name) and engage in cooperation with the government legally chosen by Taiwan's people, while citing the ROC Constitution as saying Taiwan and China are not "subordinate" to each other.

Lai said his government will "neither yield nor provoke" on cross-strait issues, and would seek to maintain the status quo, while looking for opportunities for dialogue on the basis of parity and dignity.

"The financial sector came under heavy selling and the tourism industry also saw sell-offs, sending the broader market lower throughout the trading session," Lin said.

As investors pocketed their recent profits, the financial index lost 1.34 percent with Fubon Financial Holding Co. down 1.22 percent to close at NT$72.90, and Cathay Financial Holding Co. down 1.07 percent to end at NT$55.40. In addition, CTBC Financial Holding Co. fell 2.08 percent to close at NT$37.75, and E. Sun Financial Holding Co. ended down 1.87 percent at NT$28.85.

The tourism index, which was hit by still frozen travel ties across the Taiwan Strait, lost 1.45 percent.

Among tourism stocks, Chateau International Development Co. lost 4.56 percent to close at NT$58.60, Formosa International Hotels Corp. shed 1.81 percent to end at NT$244.00, My Humble House Hospitality Management Consulting dropped 1.53 percent to close at NT$64.30, and FDC International Hotels Corp. ended down 1.37 percent at NT$71.90.

Such pessimism toward the tourism industry also spread to airline stocks with China Airlines falling 1.08 percent to close at NT$22.80 and EVA Airways shedding 1.79 percent to end at NT$35.75.

Elsewhere in the old economy sector, Formosa Plastics Corp. dropped 1.03 percent to close at NT$67.40, and Nan Ya Plastics Corp. lost 2.62 percent to end at NT$55.70. In addition, Taiwan Cement Corp. fell 1.48 percent to close at NT$33.3 and Asia Cement Corp. ended 1.87 percent lower at NT$44.60.

"The silver lining was that the bellwether electronics sector braved the selling on the broader market with the gains posted by tech stocks on U.S. markets encouraging investors here to buy," Lin said. "TSMC, again, served as an anchor for the Taiex due to its heavy weighting."

TSMC, the most heavily weighted stock on the local market, rose 0.72 percent to close at the day's high of NT$841.00 after hitting a low of NT$830.00. TSMC's gains were equivalent to a rise of about 50 points on the Taiex, and sent the electronics index and semiconductor sub-index higher by 0.32 percent and 0.48 percent, respectively.

Among other semiconductor stocks, IC packaging and testing services provider ASE Technology Holding Co. rose 1.32 percent to end at NT$154.00, and United Microelectronics Corp., a smaller contract chipmaker, gained 1.51 percent to close at NT$53.90, while smartphone IC designer MediaTek Inc. ended unchanged at NT$1,175.00.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, bucked the upturn, falling 0.90 percent to close at NT$166.00, while artificial intelligence server maker Wiston Corp. rose 1.35 percent to end at NT$112.50, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, gained 1.54 percent to close at NT$330.00.

"In terms of TSMC, the stock stayed in consolidation and such a narrow range of fluctuations is likely to continue Wednesday before (U.S.-based AI chip designer) Nvidia Corp. releases its results and gives guidance later in the day," Lin said.

"If a sell-off emerges, however, I think the Taiex will see strong short-term support ahead of 21,000 points," Lin added.

According to the TWSE, foreign institutional investors sold a net NT$3.18 billion worth of shares on the main board Tuesday.