Taiwan shares end up on mild rebound on reduced turnover

Taipei, June 29 (CNA) Shares in Taiwan closed higher Monday on a mild technical rebound, while turnover shrank as many investors stayed alert over possible volatility down the road, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 428.14 points, or 0.96 percent, at 44,999.90 after moving between 44,594.81 and 45,521.63, a rebound from a plunge of 1,683.50 points on Friday. Turnover totaled NT$997.51 billion (US$30.99 billion), down from the average NT$1.55 trillion in the previous five sessions.

"Compared with Friday's tumble, today's gains were limited," Concord Capital Management analyst Lu Chin-wei said. "The much smaller turnover showed many investors remained cautious about more volatility after the Taiex had soared recently."

Before Monday, the Taiex had surged about 54 percent since the beginning of this year.

"Investors remained haunted by fears that the U.S. Federal Reserve will raise rates to ease inflationary pressure, and any negative leads from the Fed would send share prices to a tailspin," Lu said.

Lu said the bellwether electronics sector, heavy losses of which plunged the Taiex on Friday, bounced back Monday, up 1.06 percent, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which rose 1.28 percent to close at NT$2,370.00.

The gains posted by TSMC, which accounts for over 40 percent of total market value, contributed about 240 points to the Taiex's rise.

Other semiconductor stocks appeared mixed, with smartphone IC designer MediaTek Inc. up 0.77 percent to end at NT$3,910.00, but IC packaging and testing service provider ASE Technology Holding Co. down 0.79 percent to close at NT$627.00.

Also in the tech sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. lost 0.80 percent to end at NT$246.50, while power management solution provider Delta Electronics Inc. gained 5.25 percent to close at NT$1,905.00 and Quanta Computer Inc., another AI server supplier, ended up 1.38 percent at NT$367.00.

Lu said buying also spread to select old economy stocks, but "compared with the weighting of large tech stocks, their gains appeared minor."

In the sector, Formosa Plastics Corp. rose 1.92 percent to close at NT$53.20, and Nan Ya Plastics Corp. gained 2.36 percent to end at NT$151.50. Food brand Uni-President Enterprises Corp. grew 1.32 percent to close at NT$115.50, and Wei Chuan Foods Corp. ended up 0.82 percent at NT$12.30.

In the financial sector, which underperformed the Taiex, down 0.92 percent, Fubon Financial Holding Co. fell 4.10 percent to close at NT$128.50 and Cathay Financial Holding Co. shed 4.25 percent to end at NT$101.50.

"Expectations of a hawkish Fed have led the U.S. dollar to move higher against the Taiwan dollar," Lu said. "Such a trend is likely to prompt foreign institutional investors to cut their holdings further and move more funds out of Taiwan, adding volatility in the market."

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$6.01 billion of shares on the main board on Monday.