Taiwan shares end down amid U.S. tech volatility

Taipei, Aug. 27 (CNA) Shares in Taiwan closed slightly lower Tuesday on thin turnover in the wake of heavy losses suffered by tech stocks on markets in the United States overnight, dealers said.

Market sentiment also turned cautious as a sudden increase in international crude oil prices, potentially rekindling inflation, led to doubts over whether the U.S. Federal Reserve will slow down its pace in a rate cut cycle, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended down 55.12 points, or 0.25 percent, at 22,185.00 after moving between 22,059.51 and 22,205.11.

Turnover totaled NT$288.37 billion (US$9.04 billion), the lowest single-day total since Jan. 31, when it was NT$278.06 billion.

The market opened down 0.27 percent and selling focused on large electronics stocks, pushing the Taiex to the day's low early in the season following a 0.85 percent fall on the tech-heavy Nasdaq index and a 2.51 percent drop in the Philadelphia Semiconductor Index.

As the Taiex fell toward 22,000 points, some investors appeared willing to capitalize on the early losses of large-cap tech stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. and iPhone assembler Hon Hai Precision Industry Co., limiting the downturn by the end of the session, dealers said.

"The losses suffered by rate sensitive tech stocks at home and on U.S. markets showed concerns over the next move by the Federal Reserve in the rate cut cycle after international crude prices rose," Moore Securities Investment Consulting analyst Adam Lin said.

Overnight, international crude oil prices jumped more than 3 percent after reports said Libya shut down oil production amid escalating tensions in the Middle East.

Lin said caution toward tech stocks also came as U.S.-based artificial intelligence chip designer Nvidia Corp. was scheduled to report its quarterly earnings on Wednesday U.S. time.

"Look at today's thin turnover. I think cautious sentiment prompted many investors to stay on the sidelines," Lin said.

"But bargain hunters appeared willing to jump in after the early weakness, helping large electronics stocks and the broader market recover part of their earlier losses."

TSMC, the most heavily weighted stock on the local market, lost 0.84 percent to close at NT$942.00 after hitting a low of NT$940.00, and Hon Hai, second to TSMC in terms of market value, lost 0.82 percent to end at NT$180.50, off a low of NT$179.00.

The electronics index closed down 0.36 percent at 1,183.58, off a low of 1,177.31.

Among other tech stocks, smartphone IC designer MediaTek Inc. lost 0.41 percent to end at NT$1,210.00, and IC packaging and testing services provider ASE Technology Holding Co. dropped 0.68 percent to close at NT$147.00.

Bucking the downturn, Alchip Technologies Ltd., an application-specific integrated circuit (ASIC) designer, rose 6.37 percent to end at NT$2,670.00.

With Chinese video game "Black Myth: Wukong" selling 10 million copies worldwide within three days of its debut on Aug. 20, buying in "Wukong concept" stocks continued to rotate in the local market, Lin said.

Graphics card and motherboard maker Chaintech Technology Corp. soared 10 percent, the maximum daily increase, to close at NT$35.85 on the main board, and Albatron Technology Co. also surged 10 percent to end at NT$100.00 on the Taipei Exchange's over-the-counter market.

Lin said non-tech stocks appeared mixed Tuesday, "with the financial sector falling back on profit taking from yesterday's rally amid competition between Taishin Financial Holding Co. and CTBC Financial Holding Co. to acquire Shin Kong Financial Holding Co."

The financial sector lost 0.67 percent on Tuesday after Monday's 1.93 percent hike.

Taishin Financial lost 4.00 percent to close at NT$19.20, CTBC Financial fell 0.90 percent to end at NT$32.85, and Shin Kong Financial ended down 0.77 percent at NT$12.90.

Outperforming the broader market, Fubon Financial Holding Co. gained 0.33 percent to close at NT$92.20.

In the transportation industry, which lost 1.47 percent, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, shed 2.91 percent to close at NT$183.50.

Yang Ming Marine Transport Corp. fell 2.34 percent to end at NT$62.70, and Wan Hai Lines Ltd. closed 2.00 percent lower at NT$78.30.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. rose 2.33 percent to close at NT$83.40, while Wei Chuan Foods Corp. ended down 0.27 percent at NT$18.45.

"Turnover has shrunk in recent sessions, making it unlikely for large-cap tech stocks to climb out of their current doldrums," Lin said.

"I think that without more than NT$400 billion in turnover, it will be hard for the Taiex to jump over high technical hurdles ahead of the 60-day moving average of 22,493 points."

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$13.02 billion in shares on the market Tuesday.