Taiwan shares end down as electronics sector retreats

Taipei, Oct. 8 (CNA) Shares in Taiwan closed lower Wednesday as the bellwether electronics sector pulled back from recent strong gains after tech stocks in the United States came under pressure on a report which showed software giant Oracle Corp. could report lower-than-expected cloud-computing margins, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 148.27 points, or 0.54 percent, at 27,063.68 after moving between 26,883.99 and 27,110.43. Turnover totaled NT$452.51 billion (US$14.79 billion).

"The report on Oracle's margins prompted investors in U.S. markets to doubt artificial intelligence applications and dump AI related stocks overnight," Hua Nan Securities analyst Kevin Su said, referring to a 0.67 percent decline in the tech-heavy Nasdaq index and a 2.06 percent slide on the Philadelphia Semiconductor Index.

"The volatility on U.S. markets gave local investors an excuse to pocket their gains built in recent sessions with TSMC (Taiwan Semiconductor Manufacturing Co. (TSMC) in focus," after its American depositary receipts lost 2.77 percent Tuesday, Su said.

Contract chipmaker TSMC, the mostly heavily weighted local stock, fell 1.39 percent to close at NT$1,415.00, but came off a low of NT$1,405.00. The stock sent the electronics index lower by 0.84 percent.

"However, I remain upbeat about AI development and have faith in TSMC's fundamentals. The stock could lead the Taiex to move higher after consolidation," Su said, urging investors to keep a close eye on an investor conference the chipmaker has scheduled for Oct. 16.

With buying rotating out of TSMC, other semiconductor heavyweights benefited, with smartphone IC designer MediaTek Inc. up 0.75 percent to end at NT$1,335.00, and IC packaging and testing services provider ASE Technology Holding Co. up 0.58 percent to close at NT$174.50.

Following the negative Oracle leads, iPhone assembler and AI server supplier Hon Hai Precision Industry Co. lost 1.53 percent to end at NT$225.00, and Quanta Computer Inc., another AI server supplier, closed down 0.81 percent at NT$306.00.

However, printed circuit board makers attracted rotational buying with Compeq Manufacturing Co. rising 3.83 percent to close at NT$84.00, and Cold Circuit Electronics Ltd. gaining 1.04 percent to end at NT$435.50.

"When the electronics sector moved in weakness, investors set their sights on select old economy stocks, including wire and cable suppliers due to the tight global supply of copper," Su said.

Among them, shares in Ta Ya Electric Wire & Cable Co. rose 1.10 percent to close at NT$41.30, and Walsin Lihwa Corp. soared 7.75 percent to end at NT$29.90.

Petrochemical stocks were boosted by bargain hunting on their relatively low valuations. Formosa Plastics Corp. rose 3.33 percent to close at NT$38.75 and Formosa Chemicals & Fibre Corp. gained added 2.79 percent to end at NT$29.50.

In the financial sector, which rose 0.52 percent, Fubon Financial Holding Co. rose 1.15 percent to close at NT$87.90, and Cathay Financial Holding Co. ended up 0.15 percent at NT$65.30.

"Judging from today's movement, I think the Taiex had strong technical support ahead of 27,000 points as the market remains highly liquid."

According to the TWSE, foreign institutional investors sold a net NT$14.09 billion worth of shares on the main board Wednesday.