Taiwan shares under pressure for second day in a row amid U.S. volatility

Taipei, April 22 (CNA) Shares in Taiwan extended heavy losses from a session earlier to close down by more than 300 points Tuesday with selling sparked by volatility in the United States, after U.S. President Donald Trump's attacks on Federal Reserve Chair Jerome Powell raised worries over the independence of the American central bank, dealers said.

After falling 1.49 percent Monday, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 312.77 points, or 1.64 percent, at 18,793.43 Tuesday, after moving between 18,793.43 and 19,059.65. Turnover totaled NT$243.16 billion (US$7.48 billion).

"The sell-off on the U.S. markets showed investors lack confidence in the Trump administration, in particular at a time when the president is threatening Washington's trading partners with tariffs," Concord Securities analyst Kerry Huang said.

He was referring to the president's criticism of Powell's monetary policy, raising questions about the Fed's independence, which saw the Dow Jones Industrial Average drop by 2.48 percent overnight.

The bellwether electronics sector, which was down 2.02 percent, led the local main board to move lower with large cap semiconductor stocks in focus, Huang said.

"Investors appear anxious about how Trump will impose tariffs on semiconductors," Huang said. "For now, they rushed to trim holdings in semiconductor stocks and TSMC (Taiwan Semiconductor Manufacturing Co.) remained their major target."

Contract chipmaker TSMC, the most heavily weighted local stock, shed 2.28 percent to close at the day's low of NT$816.00, contributing more than 150 points to the Taiex's fall.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. lost 3.35 percent to end at NT$1,300.00, and application-specific integrated circuit (ASIC) designer Alchip Technologies Inc. dropped 5.23 percent to close at NT$1,995.00. Bucking the downturn, shares in United Microelectronics Corp., a smaller contract chipmaker, rose 1.49 percent to end at NT$44.30 ahead of an investor conference set to open Wednesday.

"In addition to tariffs, Taiwan's tech sector remained haunted by the latest U.S. sanctions on chip exports, including Nvidia's H20 chips, to China so artificial intelligence related stocks came under stiff pressure sending the Taiex even lower," Huang said.

Second to TSMC in terms of market value, iPhone assembler and AI server maker Hon Hai Precision Industry Co. lost 3.30 percent to close at NT$132.00, and Quanta Computer Inc., another AI server supplier, ended down 3.66 percent to end at NT$223.50.

With tech heavyweights in the doldrums, select large cap old economy stocks appeared resilient, Huang said. "But, that was technical in nature based on their relatively low valuations," he said.

Among them, Nan Ya Plastics Corp. rose 1.33 percent to close at NT$30.45, while Formosa Chemicals & Fibre Corp. ended down 0.20 percent at NT$24.55. In addition, food brand Uni-President Enterprises Corp. rose 0.94 percent to close at NT$75.40, and Standard Foods Corp. gained 0.15 percent to end at NT$33.35.

In the financial sector, which fell 1.40 percent, Cathay Financial Holding Co. shed 2.24 percent to close at NT$77.30, and Fubon Financial Holding Co. lost 2.15 percent to end at NT$50.50, while Mega Financial Holding Co. closed unchanged at NT$37.70.

"The Taiex remains in consolidation mode and if there is any rebound, profit taking could follow amid the current fragile sentiment," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$5.24 billion worth of shares on the main board Tuesday.