Taiwan shares end down on 20% tariff imposed by U.S.

Taipei, Aug. 1 (CNA) Shares in Taiwan closed lower Friday after the United States imposed a 20 percent tariff on Taiwan's imports, higher than 15 percent faced by competitors Japan and South Korea, but initially heavy losses were capped, dealers said.

The Taiex, the Taiwan Stock Exchange's weighted index, ended down 108.14 points, or 0.46 percent, at 23,434.38 after moving between 23,168.27 and 23,484.21. Turnover totaled NN$392.33 billion (US$13.08 billion).

"The market was caught off guard at the very beginning as many investors had anticipated Taiwan would get a 15 percent tariff just as Japan and South Korea did," MasterLink Securities analyst Tom Tang said.

Investors were worried the higher levy would make Taiwan exporters less competitive, Tang said, "but they gradually turned calm and started to hunt bargains after the government said the tariff was provisional and talks were continuing."

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock here, lost 1.72 percent to close at NT$1,140.00, contributing a negative 160 points to the Taiex and leading the electronics index 0.67 percent lower.

"Tech stocks, in particular in the semiconductor industry, came under heavy pressure as U.S. treasury yields spiked after Personal Consumption Expenditures (PCE) showed price growth accelerated in June, diminishing hopes of a rate cut," Tang said.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. fell 1.46 percent to end at NT$1,350.00, and United Microelectronics Corp., a smaller contract chipmaker, dropped 1.20 percent to close at NT$41.05.

IC packaging and testing services provider ASE Technology Holding Co. ended unchanged at NT$152.50.

Outside the semiconductor industry, iPhone assembler and AI server maker Hon Hai Precision Industry Co. rose 1.97 percent to close at NT$181.50 on a strategic partnership with Teco Electric and Machinery Co. through a stock swap to accelerate AI development.

Teco soared 10 percent, the maximum daily increase, to end at NT$56.10.

In addition, Quanta Computer Inc., another AI server supplier, rose 1.24 percent to close at NT$285.00, while power management solution provider Delta Electronics Inc. gained 3.70 percent to end at NT$588.00 after posting a high in net profit in the second quarter.

"Investors dumped raw material stocks amid tariff worries. Today, petrochemical stocks got hit," Tang said.

Formosa Plastics Corp. fell 4.57 percent to close at NT$40.70, Formosa Chemicals & Fibre Corp. shed 3.47 percent to end at NT$27.85, Formosa Petrochemical Corp. dropped 3.31 percent to close at NT$42.35, and Nan Ya Plastics Corp. ended down 2.81 percent at NT$39.80.

Bucking the downturn, domestic demand-oriented property developers largely moved higher with Kindom Development Co. rising 1.20 percent to close at NT$50.60 and Highwealth Construction Corp. growing 2.56 percent to end at NT$42.00.

The financial sector also outperformed the Taiex, gaining 0.63 percent. Tang suspected government-led funds were behind the buying to cap the losses on the broader market.

Yuanta Financial Holding Co. rose 1.12 percent to close at NT$31.55, Cathay Financial Holding Co. gained 0.49 percent to end at NT$61.20, and Fubon Financial Holding Co. added 0.24 percent to close at NT$82.60.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$7.07 billion in shares Friday.