Taiwan shares end slightly up as gains eroded on AI valuation worries

Taipei, Nov. 17(CNA) Shares in Taiwan ended slightly higher Monday after profit-taking eroded most of the initial gains amid lingering concerns over stretched artificial intelligence stocks at home and abroad, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 49.81 points, or 0.18 percent, at the day's low of 27,447.31, off a high of 27,723.77. Turnover totaled NT$523.41 billion (US$16.8 billion).

The market was initially led by the electronics sector as investors took cues from a rebound enjoyed by tech stocks on the U.S. markets on Friday. But this strength was compromised by the end of the session as many investors shifted to the sell side, dealers said.

"Technically speaking, heavy resistance ahead of the five-day moving average of 27,708 awaited the Taiex, so the index failed to sustain its earlier gains," Concord Securities analyst Kerry Huang said.

"More importantly, sentiment stayed cautious about expensive AI-related stocks amid fears that the U.S. markets will suffer losses down the road," Huang said.

After its American depositary receipts rose 0.93 percent on Friday, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock here, gained 1.05 percent to close at NT$1,445.00, off a high of NT$1,460.00.

"The stock faced the nearest technical hurdles around NT$1,470.00," Huang said. "After its recent strong showing, it seemed investors' willingness to chase was limited for now."

With TSMC serving as an anchor to the Taiex, other semiconductor stocks appeared mixed. Smartphone IC designer MediaTek Inc. ended unchanged at NT$1,230.00, but IC packaging and testing services provider ASE Technology Holding Co. went down 1.12 percent to close at NT$222.00.

Memory chip suppliers moved sharply higher on a supply shortage, including Nanya Technology Corp., which rose 5.05 percent to end at NT$166.50.

Other AI-related hardware makers also fell from their day's highs to offset the gains posted by semiconductors, with AI server maker and iPhone assembler Hon Hai Precision Industry Co., second to TSMC in market value, down 2.07 percent to close at NT$236.00.

Quanta Computer Inc., another AI server supplier, lost 1.25 percent to end at NT$276.00.

"Nontech stocks largely moved in weakness, but major petrochemical stocks attracted bargain hunters as they had been left behind by the electronics sector for some time," Huang said. "However, the industry remained bothered by a supply glut."

Formosa Petrochemical Corp. rose 3.20 percent to close at NT$54.90, Nan Ya Plastics Corp. rose 1.62 percent to end at NT$56.50, and Formosa Plastics Corp. added 1.29 percent to close at NT$43.10, while Formosa Chemicals & Fibre Corp. ended unchanged at NT$34.00.

In the financial sector, which lost 0.67 percent, Fubon Financial Holding Co. shed 1.61 percent to close at NT$91.80, and Cathay Financial Holding Co. ended down 1.06 percent at NT$65.30.

"AI chip designer Nvidia Corp. is set to report its results early Thursday morning (Taipei time). It is worth watching to gauge the valuation," Huang said.