Taiwan shares end down but losses capped by late session TSMC buying

Taipei, Oct. 4 (CNA) Shares in Taiwan closed lower Friday but losses were limited after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) received a boost from last ditch buying and recouped its earlier losses, dealers said.

Market sentiment has turned cautious amid escalating tensions in the Middle East after Israel bombed Lebanon early Thursday, while investors also remained alert over the upcoming September nonfarm payroll data due later Friday in Washington, dealers added.

The Taiex, the benchmark weighted index on the Taiwan Stock Exchange (TWSE), ended down 87.68 points, or 0.39 percent, at 22,302.71 after moving between 22,193.50 and 22,493.05. Turnover totaled NT$402.25 billion (US$12.55 billion).

The market opened up 0.31 percent and rose to the day's high, up 102.66 points, in the early morning session as TSMC led with initial gains after its American depositary receipts (ADRs) rose about 3.3 percent on U.S. market Wednesday and Thursday, when the Taipei market was closed due to Typhoon Krathon, dealers said.

However, with the Taiex moving closer to the 22,500 point mark, investors started to lock in their earlier gains, pushing the main board into negative territory in the mid-morning session. That weakness continued until TSMC benefited from late trading session buying, helping the broader market reduce its weakness by the end of the session, dealers said.

"The local stock market kept fluctuating in consolidation mode amid lingering geopolitical unease," Mega International Investment Services Corp. analyst Alex Huang said, referring to fears over an escalation in the Middle East after Israel's latest bombing attacks against Beirut, the capital city of Lebanon.

"Moreover, Washington will release September job data later in the day, which will enable investors to make a better assessment of the U.S. economy," Huang said. "It is no surprise that many investors appeared reluctant to chase prices despite the initial gains today."

Fortunately, TSMC, the most heavily weighted stock on the local market, returned to positive territory by the end of the session, or the Taiex could have fallen further, Huang said.

TSMC rose 0.51 percent to close at NT$977.00 after moving between NT$967.00 and NT$986.00. TSMC's gains offset the Taiex's fall by about 40 points, while the electronics index ended down only 0.06 percent at 1,192.29, off a low of 1,184.70.

"On the back of its sound fundamentals, TSMC has seen near-term technical support around NT$958.00, the 60-day moving average," Huang said.

Smartphone IC designer MediaTek Inc. was also bolstered by the late trading session, up 1.65 percent to end at NT$1,230.00.

Bucking the upturn, United Microelectronics Corp. (UMC), a smaller contract chipmaker, lost 2.05 percent to close at NT$52.00, while Novatek Microelectronics Corp., UMC's display IC design subsidiary, rose 1.35 percent to end at NT$524.00.

Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co. served as another anchor to stabilize the Taiex, rising 3.74 percent to close at NT$194.00 before the company's Tech Day event scheduled for Oct. 8-9 to introduce new electric vehicle models.

Although Jensen Huang, CEO of U.S.-based artificial intelligence chip designer Nvidia Corp., said in an interview overnight that demand for the company's next-generation AI chip Blackwell was "insane," many of Taiwan's AI-related stocks still came under pressure, sending the computer and peripheral sub-index down by 1.31 percent.

"Optimism toward AI chips has been largely reflected in the share price of these stocks. Now, investors want to see real numbers," Alex Huang said.

Among AI-related stocks, AI server maker Quanta Computer Inc. lost 2.24 percent to close at NT$262.00, and rival Wistron Corp. fell 1.48 percent to end at NT$100.00. In addition, Wistron's cloud application subsidiary Wiwynn Corp. lost 1.42 percent to close at NT$1,730.00 but AI graphics card vendor Giga-Byte Technology Co. rose 1.94 percent to end at NT$263.00.

"Market attention focused on tech stocks today with many old economy stocks marginalized," Huang said. "But, shipping stocks were an exception, suffering a plunge, as U.S. port workers and operators reached a deal to end a strike on the East Coast," Huang said.

In the transportation industry, which tumbled 6.72 percent, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, shed 9.05 percent to close at NT$186.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. plunged 9.08 percent and 10 percent, the maximum daily decline, respectively, to end at NT$64.10 and NT$89.30.

In contrast, the steel industry rose 0.70 percent, China Steel Corp., the largest steel supplier in Taiwan, rose 1.50 percent to close at NT$23.70, and Tung Ho Steel Corp. gained 1.13 percent to end at NT$80.30.

Elsewhere in the old economy sector, Formosa Plastics Corp. closed unchanged at NT$53.00, and Nan Ya Plastics Corp. ended flat at NT$46.10.

In the financial sector, which lost 0.66 percent, Fubon Financial Holding Co. dropped 0.66 percent to close at NT$90.10, and Cathay Financial Holding Co. ended down 1.05 percent at NT$66.00, while Shin Kong Financial Holding Co. rose 1.68 percent to close at NT$12.10.

"TSMC has scheduled an investor conference for Oct. 17 and before that, the stock could continue to attract buying in the hope it will give positive leads at the meeting," Huang said, adding it is possible the Taiex could challenge 23,079 points, an intraday high seen on Sept. 27, before the TSMC meeting.

According to the TWSE, foreign institutional investors sold a net NT$22.32 billion worth of shares on the main board Friday.