Taiwan shares end down as AI-related stocks on profit-taking

Taipei, Nov. 4 (CNA) Shares in Taiwan closed lower Tuesday as investors locked in profits by trimming holdings in artificial intelligence-related stocks on relatively high valuations, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange, ended down 218.03 points, or 0.77 percent, at 28,116.56 after moving between 28,033.62 and 28,554.61. Turnover totaled NT$584.89 billion (US$18.92 billion).

The market rose to the day's high in the early morning session as buying in the bellwether electronics sector continued after an overnight rally among tech stocks in the U.S.

The rally was driven in part by OpenAI and Amazon signing a US$38 billion deal to allow the ChatGPT maker to run AI systems on Amazon's data centers, dealers said.

However, selling followed with AI-related stocks in focus, pushing the Taiex down from a historic intraday high into negative territory with a wide high-to-low range of about 520 points fears over possible more losses, dealers added.

"The main board has seen profit taking in past few sessions, with today's volatility more apparent on relatively high valuations among AI-related stocks," Concord Securities analyst Kerry Huang said.

"Although deals like the one between Amazon and OpenAI were struck, some investors just wanted to see real revenue numbers after massive AI infrastructure investments," Huang said.

Among the losing AI stocks, iPhone assembler and AI server maker Hon Hai Precision Industry Co. shed 2.98 percent to close at NT$244.00, and Quanta Computer Inc., another AI server supplier, also fell 3.36 percent to end at NT$287.50.

Graphics card vendor Giga-Byte Technology Co. lost 3.61 percent to close at NT$267.00, and LITE-ON Technology Corp., which manufactures power solutions for AI servers, slid 5.56 percent to end at NT$170.00.

The Taiex's losses were partly pared by last ditch buying in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock here, which fell only 0.33 percent to close at NT$1,505.00.

Bucking the downturn, smartphone IC designer MediaTek Inc. rose 1.15 percent to end at NT$1,315.00.

"While large-cap tech stocks continued to dictate the Taiex, most of the old economy stocks still lost market attention," Huang said.

China Steel Corp., the largest steel maker in Taiwan, fell 1.09 percent to close at NT18.15, and Tung Ho Steel Corp. fell 1.92 percent to end at NT$61.30.

Meanwhile, container cargo shippers Evergreen Marine Corp. and Yang Ming Marine Transport Corp. fell 2.59 percent and 2.30 percent, respectively, to close at NT$188.00 and NT$55.20.

In the financial sector, which rose 0.52 percent on rotational buying, Fubon Financial Holding Co. rose 0.54 percent to close at NT$92.50, and Cathay Financial Holding Co. gained 1.10 percent to end at NT$64.80.

"With foreign institutional investors cutting their holdings for now to pocket recent gains, I expect the Taiex will face more technical barriers when it moves closer to 28,400-28,500 points," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$7.63 billion on the main board on Tuesday after a net sell of NT$8.45 billion on Monday.