Taiwan shares end up slightly ahead of Fed meeting results

Taipei, May 7 (CNA) Shares in Taiwan closed slightly higher Wednesday despite market sentiment turning cautious ahead of the outcome of the U.S. Federal Reserve's two-day policymaking meeting being announced Wednesday U.S. time, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended up 23.90 points, or 0.12 percent, at 20,546.49 after moving between 20,418.03 and 20,685.28. Turnover totaled NT$269.795 billion (US$8.92 billion).

"Look at the thin turnover. Many investors preferred to stay on the sidelines for the time being and wait for the results of the Fed's meeting," MasterLink Securities analyst Tom Tang said.

While analysts are expecting the Fed to leave its key interest rates unchanged, Tang said, how Fed Chair Jerome Powell talks about the economy amid the United States' uncertain tariff policy will still be closed watched.

That caution led to profit-taking in the market after an initial upturn Wednesday, Tang said.

"Fortunately, TSMC (Taiwan Semiconductor Manufacturing Co.) attracted last ditch buying to recoup its earlier losses, helping the broader market regain its footing," Tang said.

TSMC, the most heavily weighted stock in Taiwan, rose 0.87 percent to close at NT$928.00, off a low of NT$911.00.

The stock's gains contributed about 65 points to the Taiex's rise and contributed to a 0.31 percent gain by the electronics index and a 0.63 percent gain by the semiconductor sub-index.

Tang did not rule out the possibility that buying in TSMC came from government-led funds.

"Other semiconductor stocks largely came under pressure as the White House could announce tariffs on semiconductors as early as Wednesday (U.S. time)," Tang said.

U.S. President Donald Trump has threatened in the past to impose a tariff of as much as 100 percent on Taiwan's chips, but there has been no indication of whether such high tariffs would still be in the cards as the helter-skelter tariff policy weighs on the U.S. economy.

IC packaging and testing services provider ASE Technology Holding Co. lost 0.73 percent to end at NT$135.50, and smartphone IC designer MediaTek Inc. fell 0.39 percent to close at NT$1,275.00.

In addition, memory chip supplier Nanya Technology Corp. shed 2.12 percent to end at NT$34.65.

Also in the tech sector, iPhone assembler and artificial intelligence server maker Hon Hai Precision Industry Co. fell 0.68 percent to close at NT$145.00, while Quanta Computer Inc., another AI server supplier, ended unchanged at NT$254.00.

Caution about the Fed's decision also spread to old economy and financial stocks, Tang said.

In the mixed old economy sector, property developer Kindom Development Co. lost 1.34 percent to close at NT$51.60, and King's Town Construction Co. lost 1.69 percent to end at NT$52.30.

In addition, China Airlines shed 2.40 percent to close at NT$22.35 and EVA Airways dropped 1.27 percent to end at NT$42.80.

But buying rotated to so-called "military concept" stocks as aircraft maintenance services provider Air Asia Co. rose 2.84 percent to close at NT$39.85 and fighter jet maker Aerospace Industrial Development Corp. added 0.65 percent to end at NT$46.80.

The financial sector closed down 0.16 percent, with Fubon Financial Holding Co. down 1.27 percent to end at NT$78.00 and CTBC Financial Holding Co. down 1.00 percent to close at NT$39.60.

Bucking the downturn, Cathay Financial Holding Co. rose 0.54 percent to end at NT$39.60.

"Investors should keep a close eye on how the U.S. markets will react to the Fed's comments today, which will move global markets," Tang said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$13.65 billion in shares on the market Wednesday.