Taiwan shares end sharply lower on heavy U.S. tech losses

Taipei, Feb. 5 (CNA) Shares in Taiwan closed sharply lower by nearly 500 points Thursday, led by the electronics sector, as a sell-off was triggered by heavy losses among U.S. tech stocks overnight during the current earnings season, dealers said.

The Taiex, the Taiwan Stock Exchange's (TWSE) benchmark index, ended down 488.54 points, or 1.51 percent, at 31,801.27 after moving between 31,769.08 and 32,241.64. Turnover totaled NT$690.06 billion (US$21.81 billion).

"Look at the Taiex's movement, investors here used U.S. losses as an excuse to pocket their recent gains," Cathay Futures Consultant analyst Tsai Ming-yen said, citing a 1.51 percent decline in the tech-heavy Nasdaq index and a 4.36 percent plunge on the Philadelphia Semiconductor Index following results and guidance of AMD and Google's parent Alphabet.

"Ahead of the Lunar New Year holiday, many investors just wanted to keep large amounts of cash on hand," Tsai said. "But with turnover staying moderate, I don't think they dumped stocks in a panicked manner and instead appeared willing to hold onto part of their holdings."

Tsai said large-cap tech stocks were the main targets of the sell-off, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for more than 40 percent of total market value, falling 1.12 percent to close at NT$1,765.00 and contributing about 160 points to the Taiex's decline.

Among other semiconductor stocks, memory chip supplier Nanya Technology Corp. shed 6.78 percent to end at NT$275.00, while IC packaging and testing services provider ASE Technology Holding Co. slid 6.12 percent to close at NT$284.00.

Elsewhere in the electronics sector, power management solution supplier Delta Electronics Inc. lost 4.96 percent to end at NT$1,150.00, while AI server maker and iPhone assembler Hon Hai Precision Industry Co. fell 1.60 percent to close at NT$225.50.

"Although the tech sector was hit hard, buying rotated into non-tech stocks," Tsai said. "The financial sector braved the headwinds and lent some support to the Taiex."

With the financial sector up 0.65 percent, CTBC Financial Holding Co. rose 0.98 percent to end at NT$51.70 and Fubon Financial Holding Co. gained 0.86 percent to close at NT$93.50 while Cathay Financial Holding Co. ended down 0.26 percent at NT$76.00.

Tourism stocks also benefited from rotational buying, with Formosa International Hotels Corp. rising 1.07 percent to close at NT$189.50 and Lion Travel Service Co. gaining 4.45 percent to end at NT$176.50 on relatively low valuations.

"There are only four sessions left before the Lunar New Year holiday. I expect the Taiex will move around 31,638 points, the 20-day moving average, during this period," Tsai said.

According to the TWSE, foreign institutional investors sold a net NT$72.69 billion of shares on the main board Thursday.