Taiwan shares end up ahead of Nvidia results

Taipei, Aug. 28 (CNA) Shares in Taiwan closed higher after earlier losses Wednesday as investors embraced the idea that U.S. AI chip designer Nvidia Corp. would give positive leads in an investor conference slated to open later in the day, dealers said.

However, turnover remained limited, making it hard for the local main board to challenge stiff technical resistance ahead of the 60-day moving average of around 22,513 points, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 185.66 points, or 0.84 percent, at the day's high of 22,370.66, off a low of 22,108.86. Turnover totaled NT$309.17 billion (US$9.67 billion).

The market opened up 0.12 percent and buying continued in the early morning session as investors took cues from a 1.10 percent hike on the Philadelphia Semiconductor Index overnight, led by Nvidia, which will report its second-quarter results after Wednesday's closing bell U.S. time, dealers said.

Selling, however, set in during the mid-morning session and pushed down the Taiex by about 76 points before buying restarted, mainly in the afternoon session, as investors rushed to pick up AI-related stocks including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), and iPhone assembler Hon Hai Precision Industry Co.

This vaulted the Taiex to the day's high at the end of the session.

TSMC, the most heavily weighted stock in the local market, which provides high-end pure-play foundry services to Nvidia, rose 2.34 percent to close at the day's high of NT$964.00 after moving above the previous closing level throughout the session.

TSMC's gains contributed around 180 points to the Taiex increase, sending the bellwether electronics index 1.34 percent higher.

Second in terms of market value, Hon Hai gained 2.77 percent to end at NT$185.50 after hitting a low of NT$179.50.

"Buying of these AI-related stocks showed investors have high hopes about Nvidia's results and guidance," Mega International Investment Services Corp. analyst Alex Huang said.

In addition, AI server Quanta Computer Inc. rose 1.09 percent to close at NT$278.50, off a low of NT$272.00.

"The three stocks served as an anchor to the Taiex gains today, while other tech heavyweights largely came under pressure to cap the upturn," Huang said.

Among the falling large-cap electronics stocks, smartphone IC designer MediaTek Inc. lost 0.83 percent to end at NT$1,200.00, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., dropped 0.50 percent to close at NT$3,015.00.

In addition, flat panel maker AUO Corp. ended down 0.89 percent at NT$16.75, although the company has agreed to sell two plants to the Taiwan unit of U.S.-based dynamic random access memory (DRAM) chip supplier Micron Technology Inc. for NT$8.1 billion.

The effects of the blockbuster Chinese video game "Black Myth: Wukong" continued to boost some tech stocks with gaming PC brand Micro-Star International Co. rising 1.94 percent to close at NT$183.40 and graphics card and motherboard maker Chaintech Technology Corp. soaring 10 percent, the maximum daily increase, to end at NT$39.40.

While market attention focused on select large-cap tech stocks, financial and old economy stocks largely struggled, Huang said.

"The financial sector fell following previous gains with the potential merger or acquisition largely priced in," Huang said, referring to the competition between CTBC Financial Holding Co. and Taishin Financial Holding Co. to acquire Shin Kong Financial Holding Co.

The financial sector lost 0.18 percent with Taishin Financial falling 1.56 percent to close at NT$18.90, but Shin Kong Financial and CTBC Financial rose 0.78 percent and 0.76 percent, respectively, to end at NT$13.00 and NT$33.10. In addition, Fubon Financial Holding Co. closed down 0.22 percent at NT$92.00.

In the old economy sector, Formosa Plastics Corp. dropped 0.39 percent to close at NT$51.70, and Formosa Chemicals &Fiber Corp. lost 0.23 percent to end at NT$43.95. Elsewhere in the sector, Chung-Hsin Electric & Machinery Manufacturing Corp. fell 1.13 percent to close at NT$174.50 and Fortune Electric Co. shed 2.21 percent to end at NT$665.00.

"While the market has widely anticipated the U.S. Federal Reserve will kick off a rate cut cycle in September, investors had better keep a close eye on the upcoming inflation data," Huang said, referring to the July Personal Consumption Expenditures Price Index due Friday U.S. time.

Meanwhile, Huang cautioned technical hurdles ahead of the 60-day moving average remain high, and without NT$400 billion or higher in daily turnover, it will be hard for the Taiex to take on the technical resistance.

Despite the gains in the Taiex, foreign institutional investors sold a net NT$11.55 billion worth of shares on the main board, according to the TWSE.