Taiwan shares end lower as large-cap stocks under pressure

Taipei, Nov. 14 (CNA) Shares in Taiwan closed lower Thursday as heavyweights across the board came under pressure to push down the broader market after a mixed performance of the U.S. markets overnight, dealers said.

Market sentiment weakened amid growing fears that the U.S. Federal Reserve will slow down its pace in a rate-cut cycle following the return to the presidency of Donald Trump, who has threatened to raise tariffs when he takes office in January, which could boost inflation, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 144.85 points, or 0.63 percent, at 22,715.38 after moving between 22,619.71 and 22,893.82. Turnover totaled NT$399.66 billion (US$12.27 billion).

The market opened down 0.17 percent and selling escalated with the bellwether electronics sector in focus to send the Taiex to the day's low.

The Taiex fell about 240 points in the mid-morning session in the wake of a 2.0 percent decline on the Philadelphia Semiconductor Index despite a 0.11 percent rise on the Dow Jones Industrial Average on the U.S. markets on Wednesday, dealers said.

In the afternoon session, however, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, trimmed its earlier losses, helping the local main board come off its early low by the end of trade, dealers added.

"Tech stocks on the U.S. markets weakened overnight and their Taiwanese counterparts simply followed suit today as fears were growing that Trump's tariff hikes will boost inflation, prompting the Fed to scale back its rate cut efforts," Mega International Investment Services Corp. analyst Alex Huang said.

"Fortunately, TSMC climbed out of its earlier weakness to stay flat from the previous closing level. Otherwise, the Taiex would have fallen further," Huang said, adding the stock saw active bargain hunting as it moved closer to the technical support ahead of NT$1,000.00 on the back of its sound fundamentals.

While its American depositary receipts fell 2.66 percent in the United States overnight, TSMC closed unchanged at NT$1,035.00 on Thursday, off a low of NT$1,025.00.

The rebound from its low offset the Taiex's losses by about 80 points, while the electronics index ended down 0.57 percent at 1,247.05 after hitting a low of 1,239.00.

Other semiconductor stocks lagged behind TSMC with IC packaging and testing services provider ASE Technology Holding Co. down 1.91 percent to close at NT$154.00, United Microelectronics Corp., a smaller contract chipmaker, down 1.75 percent to end at NT$45.00, and smartphone IC designer MediaTek Inc. down 1.59 percent to close at NT$1,235.00.

After shares of U.S.-based artificial intelligence (AI) chip designer Advanced Micro Devices, Inc., which announced it was laying off 4 percent of its workforce, lost 3.01 percent overnight, and many of Taiwan's AI-related stocks moved lower Thursday.

Among them, iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, lost 1.40 percent to end at NT$211.50. In addition, Quanta Computer Inc. and Wistron Corp., another two major AI server suppliers, also fell 2.33 percent and 2.07 percent, respectively, to close at NT$314.50 and NT$118.50.

Bucking the downturn, Wiwynn Corp., Wistron's cloud-enabling service subsidiary, rose 5.61 percent to end at NT$2,260.00 after its third-quarter earnings hit a new high.

"Weakening investors' sentiment also spread to old economy stocks as Trump's victory has created uncertainties to the market," Huang said.

In the petrochemical industry, which fell 1.61 percent, Formosa Plastics Corp. shed 3.35 percent to close at TN$43.30, Nan Ya Plastics Corp. dropped 2.34 percent to end at NT$39.60, Formosa Chemicals & Fiber Corp. lost 2.11 percent to close at NT$34.80, and Formosa Petrochemical Corp. ended down 1.47 percent to end at NT$43.45.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. lost 1.47 percent to close at NT$86.00, and cooking oil supplier Formosa Oilseed Processing Co. fell 6.30 percent to end at NT$72.90.

Airline stocks appeared resilient with EVA Airways rising 1.63 percent to close at NT$40.50, and China Airlines gaining 0.43 percent to end at NT$23.45.

In the financial sector, which lost 0.54 percent, Cathay Financial Holding Co. fell 0.90 percent to close at NT$66.20, and Fubon Financial Holding Co. ended down 0.77 percent at NT$90.30.

"Foreign institutional investors still hold a large number of short position futures contracts. I do not rule out the possibility that they will continue to cut their holdings in the spot market in a bid to profit in futures ahead of the settlement of November contacts scheduled for next week," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$25.43 billion worth of shares on the main board Thursday.