Taiwan shares down sharply ahead of Fed meeting outcome

Taipei, March 19 (CNA) Shares in Taiwan took a beating Wednesday with the bellwether electronics sector in focus due to U.S. tech stocks' heavy losses ahead of the conclusion of the U.S. Federal Reserve's two-day policymaking meeting later in the day, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 310.84 points, or 1.40 percent, at 21,960.83 after moving between 21,942.69 and 22,247.66. Turnover totaled NT$302.81 billion (US$9.18 billion).

"While many investors have anticipated the Fed will leave rates unchanged this time, they are waiting for the Fed's comments about the economy amid tariff threats (by the Trump administration) as well as more clues about its next move," Concord Securities analyst Kerry Huang said.

"Before reciprocal tariffs from the U.S. kick in next month, volatility on the U.S. markets continues to dictate large-cap electronics stocks in Taiwan," Huang said, referring to a 1.71 percent fall on the tech-heavy Nasdaq index overnight.

After its American depositary receipts fell 1.38 percent, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock here, lost 1.96 percent to close at NT$952.00, contributing about 150 points to the Taiex's fall and sending the electronics index down 1.72 percent.

Meanwhile, TSMC's IC design subsidiary Global Unichip Corp. shed 2.51 percent to end at NT$1,165.00, and IC packaging and testing services provider ASE Technology Holding Co. dropped 1.56 percent to close at NT$158.00.

"Moreover, new artificial intelligence chips unveiled by Nvidia Corp. overnight seemed to fail to impress investors," Huang said. "So, Nvidia shares were hit (down 3.43 percent) and Taiwanese AI-related stocks followed suit."

iPhone assembler and AI server maker Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 2.09 percent to close at NT$164.00, while Quanta Computer Inc., another AI server supplier, fell 2.31 percent to end at NT$253.50.

Huang said selling was also seen among many nontech stocks amid cautious sentiment.

Shihlin Electric & Engineering Corp. lost 1.75 percent to close at NT$168.00, and Allis Electric Co. fell 1.80 percent to end at NT$109.00.

Meanwhile, food brand Uni-President Enterprises Corp. dropped 1.58 percent to close at NT$80.80, but rival Taisun Enterprise Co. ended up 0.23 percent at NT$21.60.

Military-related stocks attracted buying amid escalating cross-strait tensions, with fighter jet developer Aerospace Industrial Development Corp. soaring 10 percent, the maximum daily increase, to close at NT$51.90 and aircraft maintenance firm Evergreen Aviation Technologies Corp. gaining 1.45 percent to end at NT$105.00.

In the financial sector, which lost 0.68 percent, E. Sun Financial Holding Co. fell 0.50 percent to end at NT$29.85, despite the company announcing the acquisition of Prudential Financial's investment trust assets in Taiwan.

"As foreign institutional investors stay on the sell side, I expect the Taiex will see further volatility," Huang said. "Strong technical support is unlikely until the index test 20,922 points, the day's low on Sept. 4, 2024."

According to the TWSE, foreign institutional investors sold a net NT$34.14 billion worth of shares on the main board on Wednesday.