Taiex's losses mitigated by TSMC resilience

Taipei, Oct. 8 (CNA) Shares in Taiwan lost value on Tuesday but contract chipmaker Taiwan Semiconductor Manufacturing Co.'s (TSMC) resilience helped the broader market recoup part of its initial losses by the end of the session, dealers said.

Investors remained upbeat about TSMC's outlook in expectation of an investor conference scheduled for Oct. 17, while selling of old economy stocks, including those in the petrochemical industry, was seen on the local main board, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 91.17 points, or 0.40 percent, at 22,611.39 after moving between 22,418.38 and 22,691.32 during the session. Turnover totaled NT$371.47 billion (US$11.54 billion).

The market opened down 11.24 points and selling pushed down the Taiex by about 285 points to the day's low in the mid-morning session.

Investors took cues from a 0.94 percent fall in the Dow Jones index and a 1.18 percent decline in the tech-heavy Nasdaq index on the U.S. markets overnight following a spike in the benchmark 10-year treasury yield.

With the Taiex approaching 22,400 points, bargain hunters bought TSMC stocks, reversing earlier losses to close up 0.50 percent at NT$1,010.00, off the session's low of NT$997.00.

TSMC's recovery offset about 150 points in the Taiex's decline with the electronics index down only 0.12 percent at 1,217.19, coming off the day's low of 1,205.82, and the semiconductor sub-index up 0.21 percent.

"Investors remained optimistic about artificial intelligence development," Cathay Futures Consultant analyst Tsai Ming-han said. "As the most important supplier of pure wafer foundry services for AI chips, TSMC simply got a boost from the strength of U.S.-based AI chip designer Nvidia Corp. overnight."

Nvidia shares rose 2.24 percent on the U.S. markets on Monday, while TSMC's American depositary receipts (ADRs) also gained 1.85 percent.

"Amid optimism toward TSMC's Oct. 17 investor conference and its September sales report due Wednesday, investors just continued to seek purchases of the stock after it ended above the NT$1,000 mark yesterday," Tsai said. It was the first time the stock had ended at the NT$1,000 mark or above since Sept. 27.

However, other semiconductor and electronics stocks came under pressure as investors locked in their Monday gains, when the Taiex soared almost 400 points or 1.79 percent, Tsai said.

Smartphone IC designer MediaTek Inc. lost 2 percent to end at NT$1,225.00, and IC packaging and testing services provider ASE Technology Holding Co. dropped 1.29 percent to close at NT$153.00. But, Scientech Corp., TSMC's IC assembly equipment supplier, gained 2.95 percent to end at NT$506.00 after soaring 10 percent, the maximum daily increase, a session earlier.

Outside the semiconductor industry, iPhone assembler Hon Hai Precision Industry Co., second only to TSMC in terms of market value, fell 1.77 percent to close at NT$194.00. In addition, AI server supplier Quanta Computer Inc. lost 0.75 percent to end at NT$265.50 and AI graphics card vendor Giga-Byte Technology Co. dropped 1.12 percent to close at NT$265.00 but Wistron Corp., another AI server supplier, ended unchanged at NT$102.00.

Tsai said that as the China market failed to sustain all of its earlier gains on Tuesday after returning from China's long National Day holiday, certain old economy stocks in Taiwan moved lower throughout the session.

"The petrochemical industry was part of them as an increase in international crude oil prices lent no support," Tsai said.

With the petrochemical industry falling 1.59 percent, Formosa Chemicals & Fibre Corp. dropped 2.77 percent to close at NT$42.10, Formosa Plastics Corp. shed 2.68 percent to end at NT$50.80, Nan Ya Plastics Corp. fell 1.76 percent to close at NT$44.65, and Formosa Petrochemical Corp. ended down 1.45 percent at NT$54.20.

Tsai said the electric machinery industry was down 3.04 percent after experiencing profit taking after recent gains, with Fortune Electric Co. falling 5.66 percent to close at NT$617.00, and Allies Electric Co. shedding 2.42 percent to end at NT$121.00.

Elsewhere in the old economy sector, property developer Kindom Development Co. lost 1.75 percent to close at NT$47.75, and King's Town Construction Co. shed 2.80 percent to end at NT$90.10.

In the financial sector, which lost 0.59 percent, Cathay Financial Holding Co. fell 0.44 percent to close at NT$67.70, while Fubon Financial Holding Co. gained 0.33 percent to end at NT$91.40.

"As fears over a recession in the United States have subsided, the U.S. markets could see some support even if downward pressure emerges," Tsai said. "So, the Taiwan market is expected to move in a narrow range with the technical floor expected at around 22,200 points, the five-day moving average, in the short term."