Taiwan shares edge down despite stable Taiwan dollar

Taipei, May 6 (CNA) The Taiwan dollar showed signs of stabilizing Tuesday, but shares in Taiwan still closed slightly lower as investors remained concerned over possible American tariffs on semiconductor imports, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended down 10.40 points, or 0.05 percent, at 20,522.59 after moving between 20,349.56 and 20,623.85. Turnover totaled NT$302.92 billion (US$10.04 billion).

After opening down 179.11 points, the market rallied and rose to the day's high just before noon. But selling set in and escalated late in the trading session, with large cap semiconductor stocks in focus, to push the Taiex into negative territory, dealers said.

"The initial gains came after the Taiwan dollar stabilized, leaving rapid appreciation against the greenback behind," Mega International Investment Services analyst Alex Huang said.

"Investors seemed relived to some extent after the central bank, the largest player in Taiwan's currency market, said volatility was over."

The U.S. dollar plunged 6.21 percent Friday and Monday, sparking a sell-off on the stock market amid worries over potentially big foreign exchange losses suffered by Taiwanese exporters.

Reversing its steep fall in the previous two sessions, however, the greenback rose NT$0.135 Tuesday to close at NT$30.280.

"But, possible tariffs on semiconductors returned to hurt sentiment. So TSMC (Taiwan Semiconductor Manufacturing Co.) came under pressure, dragging the broader market lower," Huang said.

Contract chipmaker TSMC, the most heavily weighted stock here, lost 1.92 percent to close at NT$920.00. Its losses sent the electronics index 0.50 percent lower and the semiconductor sub-index 1.49 percent lower.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. fell 1.16 percent to end at NT$1,280.00, and Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, shed 3.59 percent to close at NT$1,075.00. Bucking the downturn, IC packaging and testing services provider ASE Technology Holding Co. rose 1.87 percent to close at NT$136.50.

A stable Taiwan dollar drew buying in tech hardware suppliers.

iPhone assembler and artificial intelligence server maker Hon Hai Precision Industry Co. closed 2.46 percent higher at NT$146.00, and Quanta Computer Inc., another AI server supplier, rose 3.04 percent to end at NT$254.00.

The currency issue also lent support to the financial sector, which rose 1.21 percent, amid eased concerns over a decline in the value of insurance companies' assets in foreign markets, dealers said.

Cathay Financial Holding Co. gained 2.19 percent to close at NT$55.90, and E. Sun Financial Holding Co. added 2.69 percent to end at NT$28.60, while Fubon Financial Holding Co. lost 1.25 percent to close at NT$79.00.

Airline stocks rode the wave of a higher Taiwan dollar, which could give local consumers an extra incentive to travel overseas.

China Airlines rose 3.15 percent to end at NT$22.90, and EVA Airways gained 5.35 percent to close at NT$43.35. Tigerair Taiwan soared 10 percent, the maximum daily increase, to end at NT$103.50.

"In addition to the currency issue, investors should follow the Federal Reserve policymaking meeting (slated to open later in the day)," Huang said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$15.75 billion in shares on the market Tuesday.