Late rally led by TSMC limits losses on Taiwan exchange

Taipei, Sept. 2 (CNA) Shares in Taiwan closed slightly lower Monday after a rally in the final 10 minutes of the session led by Taiwan Semiconductor Manufacturing Co. (TSMC) pulled the Taiex up from the day's low, dealers said.

Non-tech stocks were mostly down, but the financial sector attracted interest on rumors that the Financial Supervisory Commission (FSC) will agree to a tender offer proposed by CTBC Financial Holding Co. to acquire Shin Kong Financial Holding Co., dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended down 32.99 points, or 0.15 percent, at 22,235.10 after moving between 22,178.04 and 22,439.31. Turnover totaled NT$286.19 billion (US$9.34 billion).

The market opened up 0.33 percent and rose about 170 points in a matter of minutes to hit the day's high after the Dow Jones Industrial Average rose 0.55 percent and the tech-heavy Nasdaq index gained 1.13 percent on Friday.

But as the Taiex faced stiff technical resistance ahead of the 60-day moving average of 22,551 points, selling set in for most of the rest of the session to pull many tech heavyweights into negative territory.

With 10 minutes left, however, TSMC, the most heavily weighted stock in the local market, regained its footing, and it moved into positive territory by the end of the session at 1:30 p.m.

TSMC closed 0.42 percent higher at NT$948.00 after hitting a low of NT$943.00, and helped the electronics index recoup part of its earlier losses to end down only 0.10 percent.

Concord Securities analyst Kerry Huang said TSMC helped the market cap its losses but that did not mean a rally was imminent.

"It's unlikely for TSMC and other large cap tech stocks to stage a rally now due to low turnover and the high technical hurdles the Taiex is faced with ahead of the 60-day moving average," Huang said.

If there is any room for optimism, it could be that investors are hopeful the Fed will cut interest rates this month after the PCE data," Huang said, referring to the Personal Consumption Expenditures index.

The index is an indicator of inflation, and the rise in the index reported on Friday in the United States was in line with market expectations.

In the semiconductor industry, smartphone IC designer MediaTek Inc. lost 2.12 percent to close at NT$1,225.00, and dynamic random access memory (DRAM) chip maker Nanya Technology Corp. shed 2.09 percent to end at NT$51.60.

IC packaging and testing services provider ASE Technology Holding Co. dropped 0.33 percent to close at NT$153.00, and Alchip Technologies Ltd., an application-specific integrated circuit (ASIC) designer, ended down 1.13 percent at NT$2,620.00.

"After (U.S.-based artificial intelligence chip designer) Nvidia Corp.'s latest quarterly earnings failed to impress investors last week, there are growing worries that AI-related growth will moderate," Huang said.

Among AI-related stocks, AI server maker Quanta Computer Inc. lost 0.37 percent to close at NT$267.00, and rival Wistron Corp. dropped 1.48 percent to end at NT$100.00.

Meanwhile, Wistron's cloud application subsidiary Wiwynn Corp. fell 2.37 percent to close at NT$1,855.00, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, ended down 2.30 percent at NT$255.00.

In addition, iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, lost 0.81 percent to close at N$183.00.

"The financial sector outperformed the broader market, giving an additional boost to the Taiex, on hopes that the FSC will conditionally approve a tender offer plan by CTBC Financial to acquire Shin Kong Financial," Huang said.

He was referring to a local report that said the commission will issue the approval by requesting CTBC Financial to inject more capital into Shin Kong Life Insurance, which is owned by Shin Kong Financial.

With the financial index up 0.66 percent, CTBC Financial, which is competing with Taishin Financial Holding Co. to acquire Shin Kong Financial, rose 1.38 percent to end at NT$33.10, and Shin Kong Financial closed unchanged at NT$12.90.

Taishin Financial, which has proposed a stock swap for a merger with Shin Kong Financial, ended up 0.54 percent at NT$18.60.

Huang said old economy stocks largely felt the pinch of profit-taking throughout the session.

In the transportation sector, which lost 2.11 percent after the Shanghai Containerized Freight Index moved lower, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, fell 3.19 percent to close at NT$182.00.

Rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. dropped 3.41 percent and 4.10 percent, respectively, to end at NT$62.30 and NT$79.50.

Formosa Plastics Corp. dropped 2.13 percent to close at NT$50.50, and Nan Ya Plastics Corp. lost 1.99 percent to end at NT$44.40.

In the construction sector, King's Town Construction Co. fell 2.81 percent to close at NT$121.00, and Highwealth Construction Corp. shed 2.15 percent to end at NT$54.50.

"Before the Fed holds its next policymaking meeting (Sept. 17-18), the U.S. markets are likely to move in consolidation and the Taiwan market could follow suit," Huang said.

"If there are any corrections, the Taiex could see solid technical support at around 21,941 points, the 20-day moving average."

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$15.99 billion in shares on the market Monday.