Taiwan shares falter, pulled down by tech stocks after U.S. losses

Taipei, May 13 (CNA) Shares in Taiwan moved sharply lower Wednesday, dragged down by the bellwether electronics sector following U.S. tech losses overnight on a spike in inflation, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 523.82 points, or 1.25 percent, at 41,374.5 after moving between 41,014.53 and 41,795.92. Turnover totaled NT$1.20 trillion (US$37.87 billion).

"The U.S. April inflation data weighed on market sentiment as American treasury yields spiked, which could lead the Federal Reserve to turn more hawkish toward its monetary policy," Concord Securities analyst Kerry Huang said.

The U.S. consumer price index rose by a higher-than-expected 3.8 percent from a year earlier in April, marking the largest increase since May 2023, dragging down the Philadelphia Semiconductor Index by 3.01 percent.

"High treasure yields make tech stocks less attractive," Huang said.

"So Taiwan's semiconductor stocks followed their American counterparts, with TSMC (Taiwan Semiconductor Manufacturing Co.) as one of the major targets, as investors seized on the inflation lead to pocket their gains built recently amid AI optimism," Huang said.

After its American depositary receipts fell 1.79 percent, contract chipmaker TSMC, which accounts for over 40 percent of the market's total value, lost 1.55 percent to close at NT$2,220.00.

That contributed about 280 points to the Taiex's fall and helped send the electronics index down 1.51 percent.

United Microelectronics Corp., a smaller contract chipmaker, lost 5.84 percent to end at NT$98.40, and smartphone IC designer MediaTek Inc. fell 5.54 percent to close at NT$3,495.00.

However, memory chip supplier Macronix International Co. soared 10 percent, the maximum daily increase, to end at NT$168.00.

Also in the tech sector, power management solution provider Delta Electronics Inc. lost 1.37 percent to close at NT$2,165.00, but iPhone assembler and AI server maker Hon Hai Precision Industry Co. rose 0.40 percent to end at NT$251.00.

Huang said old economy stocks largely moved in line with the broader market.

Evergreen Marine Corp., Taiwan's largest container cargo shipper, fell 1.87 percent to close at NT$210.00, and rivals Yang Mine Marine Transport Corp. and Wan Hai Lines Ltd. lost 1.70 percent and 3.38 percent, respectively, to end at NT$49.25 and NT$74.30.

Shihlin Electric & Engineering Corp. dropped 2.47 percent to close at NT$201.50, and Fortune Electric Co. shed 2.08 percent to end at NT$895.00.

In the financial sector, which rose 0.99 percent on rotational buying, CTBC Financial Holding Co. gained 2.61 percent to close at NT$54.90, Cathay Financial Holding Co. added 1.18 percent to end at NT$77.30, and Fubon Financial Holding Co. closed up 1.07 percent at NT$94.70.

"Judging from today's movement, I think the Taiex's nearest technical support is ahead of 41,000," Huang said.

"But whether the index will hold firm will depend how the U.S. markets will perform, and the U.S.-China summit (slated for Thursday) is worth watching."

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$43.43 billion in shares on Wednesday.