Taiwan shares end lower as electronics retreat on AI concerns

Taipei, Dec. 1 (CNA) Taiwan shares closed nearly 300 points lower Monday as concerns over overstretched AI valuations triggered heavy selling in the bellwether electronics sector, pulling the broader market into negative territory.

The Taiex, the Taiwan Stock Exchange's (TWSE) benchmark index, ended down 283.95 points, or 1.03 percent, at the day's low of 27,342.53, after hitting an early high of 27,697.06. Turnover totaled NT$476.47 billion (US$15.16 billion).

The market opened 0.17 percent higher, tracking gains on Wall Street Friday, but momentum quickly faded. Selling escalated late in the session, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) weighing heavily on the index and pulling the Taiex below its 20-day moving average of 27,418 points.

"The Friday session in the United States was cut short by the Thanksgiving weekend and failed to serve as a meaningful indicator for the Taiex," Concord Securities analyst Kerry Huang said.

"With the local main board still haunted by fears over an AI bubble, it was no surprise that the initial gains paved the way for profit-taking as investors aimed to shun possible further losses," Huang said.

TSMC, despite a 0.53 percent rise in its American depositary receipts Friday, remained the main target of selling. The stock fell 2.08 percent to NT$1,410.00, off a high of NT$1,445.00, contributing around 240 points of downward pressure on the Taiex.

The electronics subindex lost 1.32 percent.

In contrast, MediaTek Inc. rose 3.58 percent to end at NT$1,445.00 after Morgan Stanley raised the smartphone IC designer's target price to NT$1,588 from NT$1,288.

United Microelectronics Corp., a smaller contract chipmaker, gained 1.53 percent to close at NT$46.50, while memory chipmaker Nanya Technology Corp. added 2.40 percent, finishing at NT$149.50.

Among other tech heavyweights, AI server maker and iPhone assembler Hon Hai Precision Industry Co., the second-largest stock by market value, slipped 1.55 percent to finish at NT$222.00.

Non-tech shares were mixed, though some benefited from links to the electronics supply chain. Nan Ya Plastics Corp. gained 3.65 percent to close at NT$61.10 on a price spike for its copper-clad laminate used in printed circuit boards.

Buying also rotated into select old-economy stocks on low valuations. Far Eastern New Century Corp. rose 1.42 percent to close at NT$28.60, and Makalot Industrial Co. added 1.11 percent to end at NT$320.00.

However, property developers underperformed, with King's Town Construction Co. down 4.02 percent to NT$42.95 and Highwealth Construction Corp. down 0.66 percent to NT$37.70.

In the financial sector, which fell only 0.05 percent, Cathay Financial Holding Co. rose 0.93 percent to close at NT$64.80, while Fubon Financial Holding Co. ended down 0.86 percent at NT$91.80.

Foreign institutional investors sold a net NT$24.35 billion worth of shares on the main board on Monday, according to the TWSE.