Taiwan shares end lower ahead of Fed's decision

Taipei, Sept. 18 (CNA) Shares in Taiwan closed down Wednesday amid caution ahead of the release of the outcome of the U.S. Federal Reserve's two-day policymaking meeting later in the day, dealers said.

Selling focused on large-cap tech stocks, which pushed the broader market near the nearest technical support of around 21,801 points, the 20-day moving average. Meanwhile, select old economy stocks appeared resilient, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 171.24 points, or 0.78 percent, at 21,678.84 after moving between 21,584.63 and 21,859. 16. Turnover totaled NT$328.05 billion (US$10.28 billion), up from NT$236.05 billion on Monday. The local market was closed on Tuesday for the Mid-Autumn Festival holiday.

The market opened down 36.54 points, or 0.17 percent, and continued to move in a narrow range for the rest of the morning session following a mixed performance on the U.S. markets on Tuesday, dealers said. That day, the Dow Jones Industrial Average fell 0.04 percent but the tech-heavy Nasdaq index gained 0.20 percent.

Downward pressure escalated in the afternoon session as electronics heavyweights suffered increasing losses and old economy stocks saw their earlier gains eroded, pushing the Taiex down by more than 170 points by the end of the session, dealers said.

The bellwether electronics index fell 1.24 percent, leading the local main board to move lower.

"The lackluster performance on the U.S. markets and the losses on the local main board largely reflected the cautious sentiment among many investors as they await a Fed rate decision," Mega International Investment Services Corp. analyst Alex Huang said.

"Investors are wondering whether the Fed will cut rates by 25 basis points or 50 basis points this time," Huang said. "More importantly, they are watching closely to see what the Fed will say about the economy."

Due to such caution, Huang said, it was no surprise that investors rushed to sell liquid tech stocks in the afternoon session, pushing Wednesday's turnover past the NT$300 billion mark.

Among the falling semiconductor stocks, dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. lost 3.00 percent to close at NT$45.70, smartphone IC designer MediaTek Inc. fell 2.21 percent to end at NT$1,105.00, and United Microelectronics Corp. (UMC), the second largest contract chipmaker in Taiwan, closed 1.28 percent down at NT$53.80.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, lost 0.63 percent to end at NT$941.00 after coming off a low of NT$933.00. With TSMC recovering some of its earlier losses, the semiconductor sub-index only lost 0.96 percent, outperforming the entire electronics sector.

"TSMC was resilient compared with other big tech stocks or the Taiex would have fallen further," Huang said.

Also in the semiconductor industry, Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, lost 4.50 percent to close at NT$98.00, and Novatek Microelectronics Corp., UMC's display IC design unit, shed 6.11 percent to end at NT$499.50.

In the wake of concerns over iPhone 16 sales in China because of an AI service delay, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 3.87 percent to close at NT$174.00. Meanwhile, Largan Precision Co., which supplies smartphone camera lenses to Apple, fell 4.57 percent to end at NT$2,505.00.

"The worries over the Fed's next move impacted tech stocks and also affected buying in old economy stocks. This led to some profit-taking toward the end of the session," Huang said.

In the old economy sector, Formosa Plastics Corp. closed unchanged at NT$48.25 but came off a high of NT$49.70, and Nan Ya Plastics Corp. also ended at NT$42.15 after hitting a high of NT$42.70.

In addition, TCC Group Holdings Co., one of the leading cement suppliers in Taiwan, fell 0.31 percent to close at NT$32.10 after coming off a high of NT$32.25, and rival Asia Cement Corp. lost 0.44 percent to end at NT$44.80, off a high of NT$45.45.

Bucking the downturn, Shihlin Electric & Engineering Corp. rose 1.41 percent to close at NT$216.00, and Fortune Electric Co. soared 7.80 percent to end at NT$622.00 on hopes that the government's massive investments to upgrade the country's electricity grid network would boost their profitability.

Amid rising freight rates, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 1.36 percent to close at NT$187.00. Rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 1.46 percent and 2.81 percent, respectively, to end at NT$62.60 and NT$80.50.

In the financial sector, which fell 0.05 percent, Cathay Financial Holding Co. rose 0.16 percent to close at NT$63.20 and Fubon Financial Holding Co. gained 0.35 percent to end at NT$87.10.

Meanwhile, Shin Kong Financial Holding Co. lost 3.45 percent to close at NT$18.20 after the Financial Supervisory Commission rejected CTBC Financial Holding Co.'s bid to acquire it. CTBC Financial, however, rose 2.75 percent to close at NT$33.60.

"I remain upbeat about the Taiex outlook," Huang said. "After uncertainty over the Fed is removed, the Taiex should continue its uptrend and challenge the 60-day moving average of 22,359 points soon."

According to the TWSE, foreign institutional investors sold a net NT$15.92 billion worth of shares on the main board on Wednesday.