Taiwan shares end down in consolidation

Taipei, Aug. 7 (CNA) Shares in Taiwan closed lower Friday as the market fell into consolidation mode after a recent wild swing amid concerns over massive spending on AI infrastructure, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 170.79 points, or 0.38 percent, at 44,225.91 after moving between 43,941.56 and 44,827.13. Turnover totaled NT$819.20 billion (US$25.43 billion).

"After a plunge in late July amid worries over an AI bubble, many investors suffered heavy losses, so whenever the Taiex bounced back, they just rushed to pocket gains," Concord Capital Asset Management analyst Lu Chin-wei said.

"Profit-taking today focused on AI-related stocks that had fallen victim to the recent sell-off," Lu said. "The silver lining was that TSMC (Taiwan Semiconductor Manufacturing Co.) appeared resilient, preventing further losses in the Taiex."

After its American depositary receipts (ADRs) rose 1.01 percent overnight, contract chipmaker TSMC, which accounts for over 40 percent of the exchange's total market value, rose 0.21 percent to close at NT$2,370.00.

"But turnover failed to expand so it was hard for TSMC to move higher with the Taiex in consolidation," Lu said.

Other semiconductor heavyweights largely fell into negative territory, with United Microelectronics Corp., a smaller contract chipmaker, down 4.53 percent to end at NT$116.00.

IC packaging and testing firm ASE Technology Holding Co. ended 1.68 percent lower at NT$585.00.

Lu said electronics component makers also faced headwinds Friday as Yageo Corp., the world's third largest multi-layer ceramic capacitor maker, ended down 5.26 percent to close at NT$540.00, and power management solution provider Delta Electronics Inc. fell 1.79 percent to end at NT$1,650.00.

In addition, iPhone assembler and AI server maker Hon Hai Precision Industry Co. fell 1.70 percent to close at NT$260.00, and Wistron Corp., another AI server maker, closed 3.17 percent lower at NT$183.50.

"As the tech sector struggled, investors parked their funds in select old economy stocks, with raw material firms highlighted," Lu said.

Due to higher international crude oil prices, Formosa Plastics Corp. rose 1.27 percent to close at NT$55.80, and Nan Ya Plastics Corp. gained 5.32 percent to end at NT$188.00.

China Steel Corp., Taiwan's largest steel maker, added 0.26 percent to close at NT$19.05, and Tung Ho Steel Corp. rose 2.67 percent to end at NT$88.50.

Meanwhile, paper maker Cheng Loong Corp. rose 2.24 percent to close at NT$22.80, and rival YFY Inc. ended up 1.65 percent at NT$30.85.

In the financial sector, which rose 0.99 percent on rotational buying, Cathay Financial Holding Co. rose 1.95 percent to close at NT$99.40 and Fubon Financial Holding Co. ended up 0.79 percent at NT$127.00.

"Investors should watch for the U.S. July nonfarm payroll data for more clues about the U.S. economy and the direction of the Federal Reserve's monetary policy," Lu said. The latest nonfarm payroll data is due out Friday in the U.S.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$40.72 billion in shares on the market Friday.