Taiwan shares end down as TSMC pulls back

Taipei, May 26 (CNA) Shares in Taiwan closed lower Tuesday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) fell from its day's high on technical corrections after a recent rally, pushing down the broader market to negative territory, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 119.03 points, or 0.27 percent, at 43,525.37 after moving between 43,349.77 and 44,097.63. Turnover totaled NT$1.47 trillion (US$46.44 billion), compared with NT$1.35 trillion a session earlier.

"The index continued to steam ahead initially today, briefly breaching 44,000 points but selling followed with large-cap tech stocks, in particular TSMC, in focus," Hua Nan Securities analyst Kevin Su said.

"Judging from today's raised turnover, some investors rushed to trim their holdings for profits by capitalizing recent significant gains," Su said. Before Tuesday, the Taiex had soared about 50 percent since the beginning of this year on the current AI boom.

Su said the bellwether electronics sector fell victim to profit-taking, falling 0.45 percent after TSMC, which accounts for over 40 percent of total market value, came off the day's high of NT$2,320.00 to end down 1.73 percent at NT$2,270.00.

"However, TSMC's losses were technical in nature and had nothing to do with fundamentals," Su said.

TSMC's losses cost the Taiex about 320 points from the initial gains, and the selling spread to other semiconductor stocks.

IC packaging and testing services provider ASE Technology Holding Co. lost 0.97 percent to close at NT$611.00, and ASIC designer Alchip Technologies shed 5.31 percent to end at NT$4,640.00, while smartphone IC designer MediaTek Inc. rose 0.47 percent to close at NT$4,265.00.

Meanwhile, iPhone assembler and AI server maker Hon Hai Precision Industry Co. lost 0.77 percent to close at NT$259.00, while Quanta Computer Inc., another AI server supplier, ended unchanged at NT$316.50.

"The silver lining was that the financial sector served as a safe haven on its relatively low valuation," Su said. "Many financial stocks saw improving profitability due to a handsome return in the stock market."

With the financial index rising 1.52 percent, Fubon Financial Holding Co. rose 5.94 percent to close at NT$103.50, and Cathay Financial Holding Co. added 1.96 percent to end at NT$83.10.

Old economy stocks largely weakened in line with the broader market with China Steel Corp., Taiwan's largest steelmaker, falling 2.26 percent to close at NT$19.50, and Tung Ho Steel Corp. losing 1.66 percent to end at NT$65.20.

Paper supplier YFY Inc. lost 1.41 percent to close at NT$24.50, and rival Cheng Loong Corp. dropped 2.07 percent to end at NT$18.90.

"Investors should keep a close eye on the upcoming Computex, where tech heavyweights, including Nvidia's Jensen Huang, will talk, and their comments could move the market," Su said. Computex Taipei is slated to open on June 2.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$35.55 billion of shares on the main board on Tuesday.