Taiwan shares extend losses but TSMC bounces back

Taipei, July 20 (CNA) Shares in Taiwan extended losses Monday from a session earlier amid fears over further volatility after a recent strong showing, while contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) staged a technical rebound, helping the broader market cap the downturn, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 221.57 points, or 0.52 percent, at 42,449.70 after moving between 41,967.75 and 43,084.51. Turnover totaled NT$983.86 billion (US$30.37 billion).

"Witnessing the tech-heavy Seoul market continue to move lower, investors here kept cutting their holdings in semiconductor stocks, reversing an initial upturn today," Moore Securities Investment Consulting analyst Adam Lin said.

"Fortunately, TSMC appeared resilient on bargain hunting, lending some support to the broader market," Lin said. "Still, the Taiex traded below the 60-day moving average of around 43,660 points, indicating it stayed in weakness."

Reversing a 7.29 percent plunge from Friday, TSMC, which accounts for over 40 percent of total market value, rose 1.31 percent to close at NT$2,320.00. Its gains helped the Taiex trim about 240 points in losses.

"TSMC's investor conference delivered positive leads Thursday, but the stock still encountered sell-off Friday as investors feared that deleveraging in semiconductor stocks in the major markets, in particular in South Korea, would put more pressure on the global tech sector," Lin said. "I do not see anything wrong with TSMC's fundamentals."

Among other semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, plunged 10 percent, the maximum daily decline, to end at NT$130.00, IC packaging and testing services provider ASE Technology Holding Co. lost 2.77 percent to close at NT$597.00, and smartphone IC designer MediaTek Inc. ended down 0.89 percent at NT$3,340.00.

Also in the electronics sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. rose 0.21 percent to close at NT$234.50, while power management solution provider Delta Electronics Inc. fell 2.01 percent to end at NT$1,705.00.

Lin said bargain hunters also picked up select financial stocks. "I do not rule out the possibility that government-led funds stood behind the buying," he added.

Mega Financial Holding Co. rose 1.26 percent to close at NT$48.20, and E. Sun Financial Holding Co. gained 2.14 percent to end at NT$35.85. Fubon Financial Holding Co. closed down 0.80 percent at NT$123.50.

In the old economy sector, Formosa Plastics Corp. lost 3.50 percent to close at NT$60.60, and Nan Ya Plastics Corp. slid 6.28 percent to end at NT$186.50. In addition, textile brand Far Eastern New Century Corp. closed down 1.44 percent at NT$27.30.

"Investors should pay close attention to when tech stocks overseas will stabilize for clues about the Taiex's performance," Lin said. "Whether foreign institutional investors will stop their sell-off is also worth watching."

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$6.08 billion of shares on the main board on Monday after a historical high of NT$189.04 billion in net sales on Friday.