Taiwan shares edge lower as tech stocks rebound, financials gain

Taipei, July 27 (CNA) Shares in Taiwan ended slightly lower Monday, as large-cap tech stocks rebounded from early losses, while rotational buying in the financial sector helped limit losses, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 20.65 points, or 0.05 percent, at 43,634.19 after moving between 42,969.48 and 43,868.15. Turnover totaled NT$717.69 billion (US$22.18 billion).

Concord Securities analyst Kerry Huang said the index's initial losses reflected concerns that massive AI investments could fail to generate adequate revenue for major cloud service providers.

"After Alphabet (Google's parent company) reported last week that its free cash flows had turned negative, investors have remained cautious about other companies in the sector, which will release their results this week," Huang said, referring to Microsoft and Meta, which will hold investor conferences Thursday U.S. time and Amazon, whose investor conference is scheduled for Friday.

"Fortunately, large-cap semiconductor stocks bounced back from their earlier losses, particularly memory chip suppliers, helping the electronics sector and the broader market," Huang said.

Among the major memory chip suppliers, Nanya Technology Corp. rose 8.73 percent to close at NT$436.00, and Winbond Electronics Corp. gained 3.56 percent to end at NT$160.00.

Also in the semiconductor industry, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for more than 40 percent of the local market's total value, closed unchanged at NT$2,350.00 after rising from a low of NT$2,330.00. Smartphone IC designer MediaTek Inc. lost 1.87 percent to close at NT$3,680.00 after rebounding from a low of NT$3,525.00.

In addition, iPhone assembler and AI server maker Hon Hai Precision Industry Co. gained 0.20 percent to close at NT$253.00 after rising from a low of NT$246.00. Power management solutions provider Delta Electronics Inc. ended down 1.68 percent at NT$1,755.00 but rose from a low of NT$1,695.00.

"It is possible that the government-led funds were behind the buying," Huang said. "The gains posted by financial stocks could serve as evidence of the government's support."

With the financial index up 1.45 percent, Fubon Financial Holding Co. rose 1.96 percent to close at NT$130.00, Cathay Financial Holding Co. gained 1.55 percent to end at NT$98.50, and E. Sun Financial Holding Co. closed up 1.25 percent at NT$36.40. CTBC Financial Holding Co., however, ended down 0.94 percent at NT$63.00.

In the old-economy sector, Formosa Plastics Corp. lost 1.59 percent to close at NT$61.70, while Nan Ya Plastics Corp. shed 1.97 percent to end at NT$174.00. Bucking the downturn, China Airlines rose 3.66 percent to close at NT$21.25 and EVA Airways gained 3.07 percent to end at NT$41.95.

"Technically, the Taiex still ended below the 60-day moving average of around 44,036 points, indicating weakness. More volatility is possible ahead," Huang said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$8.04 billion worth of shares on the main board Monday.