Taiex end down after U.S. tech stocks tumble, but losses capped

Taipei, July 2 (CNA) Shares in Taiwan closed lower on heavy U.S. tech losses overnight but the downturn was limited on bargain hunting after the Taiex, the benchmark index of the Taiwan Stock Exchange, dipped below 46,000 points, dealers said.

The Taiex ended down 274.83 points, or 0.58 percent, at 46,744.16 after moving between 45,981.89 and 46,910.31. Turnover totaled NT$1.02 trillion (US$31.85 billion).

"With U.S. chip stocks under pressure, local electronics stocks just followed," Hua Nan Securities analyst Kevin Su said, citing the 6.27 percent fall on the Philadelphia Semiconductor Index Wednesday.

Shares in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of total market value, fell 1.60 percent to close at NT$2,465.00, and United Microelectronics Corp., TSMC's smaller counterpart, ended down 2.07 percent at NT$165.50.

Also in the tech sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. lost 0.83 percent to close at NT$239.00, and power management solution provider Delta Electronics Inc. ended down 1.01 percent at NT$1,970.00.

Tech stocks at home and abroad faced headwinds with market sentiment hurt by fears over a hawkish U.S. Federal Reserve, Su said. Fed Chairman Kevin Warsh said Wednesday he will firmly stick to the 2 percent inflation target, raising worries about the tightening of the monetary policy.

"Fortunately, the Taiex appeared resilient as bargain hunting emerged after the index dipped below 46,000 points," Su said. "Some chip heavyweights, including those involved in ASIC (application-specific integrated circuit) development, climbed from losses and lent support to the index."

Among them, smartphone IC designer MediaTek Inc. rose 0.23 percent to close at NT$4,345.00, and AIchip Technologies Inc. soared 10 percent, the maximum daily increases, to end at NT$4,895.00.

Printed circuit board (PCB)-related stocks also rode rotational buying with PCB maker Compeq Manufacturing Co. up 3.86 percent to close at NT$228.50 and PCB material supplier Elite Material Co. rising 2.17 percent to end at NT$5,655.00.

"Buying was also seen among select old economy stocks which have extended their reach to electronic material production to tap the AI era," Su said. Formosa Plastics Corp. and Formosa Chemical & Fibre Corp. jumped 10 percent to close at NT$59.70 and NT$61.90, respectively. Nan Ya Plastics Corp. gained 7.65 percent to end at NT$197.00.

Amid hopes sales will be boosted by the FIFA World Cup 2026, Eclat Textile Co. rose 1.12 percent to close at NT$315.00 and Far Eastern New Century Corp., another textile brand, ended up 0.35 percent at NT$28.40.

With the financial sector down 1.06 percent, Fubon Financial Holding Co. shed 2.45 percent to close at NT$119.50, and Cathay Financial Holding Co. ended down 1.55 percent at NT$93.50.

"Investors should keep a close eye on May sales reports (due by July 10) for more clues about the fundamentals," Su said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$89.05 billion of shares on the main board Thursday.