Taiwan shares end down after U.S. losses on job, AI concerns

Taipei, Nov. 7 (CNA) Shares in Taiwan closed lower Friday as investors took their cue from losses on U.S. markets overnight amid concerns over the job market after the latest large layoffs and overvalued artificial intelligence stocks, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 248.04 points, or 0.89 percent, at 27,651.41 after moving between 27,621.48 and 27,818.54, dipping below the nearest technical support at 27,717, the 20-day moving average. Turnover totaled NT$469.02 billion (US$15.13 billion).

"A weak U.S. jobs report prompted investors in the United States to worry about the economy, hitting stock markets overnight. In Asia, markets simply followed suit," Hua Nan Securities analyst Kevin Su said.

He was referring to a report where employers announced 153,074 cuts last month, compared to 55,597 cuts a year earlier, sending the S&P 500 index 1.12 percent lower and the tech-heavy Nasdaq index down 1.90 percent.

"Moreover, worries over an AI investment bubble continue to weigh on sentiment, with tech stocks in focus," Su said. The electronics index fell 0.97 percent.

The sell-off focused on AI hardware developers, with AI server maker Hon Hai Precision Industry Co. shedding 1.61 percent to close at NT$244.00, and Quanta Computer Inc., another AI server supplier, falling 2.05 percent to end at NT$287.00.

Graphics card vendor Giga-Byte Technology Co. lost 2.69 percent to close at NT$271.00, and Wistron Corp., which also rolls out AI servers, slid 3.17 percent to end at NT$137.50.

"The silver lining was that TSMC (Taiwan Semiconductor Manufacturing Co.) remained resilient, or the Taiex would have fallen further," Su said. "TSMC is the most important AI stock with impressively healthy fundamentals."

Contract chipmaker TSMC, the most heavily weighted local stock, fell only 0.34 percent to close at NT$1,460.00.

Among other semiconductor stocks, IC packaging and testing services provider ASE Technology Holding Co. shed 2.35 percent to end at NT$228.50, smartphone IC designer MediaTek Inc. lost 2.33 percent to close at NT$1,260.00, and United Microelectronics Corp., a smaller contract chipmaker, ended down 1.75 percent at NT$45.00.

"While tech stocks largely traded in weakness, ample liquidity led investors to park their money in select old economy stocks with low valuations," Su said.

Among outperforming old economy stocks, Formosa Plastics Corp. rose 3.35 percent to close at NT$38.60, and Formosa Chemicals & Fibre Corp. gained 2.46 percent to end at NT$29.10.

In addition, Eclat Textile Co. soared 10 percent, the maximum daily increase, to close at NT$447.50, and rival Makalot Industrial Co. surged 6.31 percent to end at NT$295.00.

However, China Steel Corp., the largest steel maker in Taiwan, lost 0.27 percent to close at NT$18.20, and Chung Hung Steel Corp. ended down 0.68 percent at NT$14.70.

In the financial sector, which fell 0.78 percent, Fubon Financial Holding Co. lost 1.42 percent to close at NT$90.50, and Cathay Financial Holding Co. ended down 1.85 percent at NT$63.50.

"After the Taiex fell below the 20-day moving average today, the main board has turned technical weaker, and more losses could follow," Su said.

According to the TWSE, foreign institutional investors sold a net NT$35.37 billion worth of shares on the main board Friday.