Taiwan shares pare losses after Trump softens China stance

Taipei, Oct. 13 (CNA) Shares in Taiwan plunged almost 1.4 percent Monday but recouped part of earlier losses as U.S. President Donald Trump appeared to pull back from a threat to hike tariffs on Chinese goods by 100 percent, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 378.50 points, or 1.39 percent, at 26,923.42 after moving between 26,470.44 and 26,965.72. Turnover totaled NT$583.97 billion (US$19.05 billion).

The market opened down more than 800 points, as investors remained jittery after Trump's threat of a "100 percent tariff" if China tightened rare earth exports sent the Dow Jones Industrial Average and the tech-heavy Nasdaq tumbling 1.90 percent and 3.56 percent, respectively, on Friday.

Trading later stabilized, as markets responded positively to Trump's Sunday follow-up post, in which the U.S. president said: "Don't worry about China, it will all be fine!"

"Bargain hunters emerged to pick large-cap electronics stocks, including TSMC (Taiwan Semiconductor Manufacturing Co.), as U.S. stock futures rebounded, pointing to a possible higher opening on the spot market after Trump softened his tone," Concord Securities analyst Kerry Huang said.

Despite a 6.41 percent fall in its American depositary receipts on Friday, TSMC, the most heavily weighted stock here, fell 1.74 percent to close at NT$1,415.00, off a low of NT$1,390.00. TSMC's recovery helped the Taiex recoup about 200 points from its earlier losses.

Bargain hunting in TSMC and other tech heavyweights showed many investors "still have high hopes that the U.S. and China are expected to sit down to resolve the trade issues," Huang said.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. lost 2.23 percent to end at NT$1,315.00, while United Microelectronics Corp., a smaller contract chipmaker, appeared resilient, down only 0.44 percent to close at NT$45.45.

Also in the tech sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. shed 3.84 percent to end at NT$213.00, and Quanta Computer Inc., another AI server supplier, lost 1.17 percent to close at NT$294.50, while PC brand Asustek Computer Inc. bucked the downturn, rising 2.95 percent to end at NT$697.00.

With the announcement of the "T-Dome," a planned Taiwan-wide comprehensive air defense system, "military concept" stocks attracted strong buying, Huang said.

Among them, drone developer Thunder Tiger Corp. gained 4.96 percent to close at NT$148.00, and aircraft maintenance services provider Air Asia Co. soared 10 percent, the maximum daily increase, to NT$60.80.

Other old economy stocks moved in line with the Taiex as Formosa Plastics Corp. lost 2.43 percent to close at NT$38.20, and Nan Ya Plastics Corp. dropped 1.64 percent to end at NT$41.90.

In the financial sector, Fubon Financial Holding Co. shed 2.23 percent to close at NT$87.80 and Cathay Financial Holding Co. ended down 1.66 percent at NT$65.30.

"I prefer to say today's losses were a technical retreat from recent strong upturn," Huang said. "Even if the Taiex will suffer more losses, the index could see the nearest technical support ahead of 26,500 points."

According to the TWSE, foreign institutional investors sold a net NT$56.31 billion worth of shares on the main board Monday.