Taiwan shares end down as TSMC gives up earlier gains

Taipei, Aug. 14 (CNA) Shares in Taiwan closed lower on profit taking ahead of the nearest technical resistance around 46,000 points as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) gave up its earlier gains, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 210.47 points, or 0.46 percent, at 45,811.01 after moving between 45,798.31 and 46,402.60, ending a four-session rising streak. Turnover totaled NT$1.06 trillion (US$33.14 billion).

"Technically speaking, TSMC has entered consolidation mode after a recent strong showing. So whenever the stock moved higher, profit taking followed, in particular as the Taiex faced technical hurdles around 46,000 points," Mega International Investment Service analyst Alex Huang said, citing the 10 percent increase ceiling the chipmaker hit on July 31.

"Despite the retreat, I do not see any change in TSMC's healthy fundamentals during the current AI boom," Huang said.

TSMC, which accounts for over 40 percent of total market value, fell 1.64 percent to close at NT$2,395.00, off a high of NT$2,440.00. Its losses cost the Taiex about 320 points and sent the bellwether electronics index 0.78 percent lower.

Among other semiconductor stocks which also came off their highs, IC packaging and testing service firm ASE Technology Holding Co. lost 1.60 percent to end at NT$616.00.

Memory chip supplier Nanya Technology Corp. dropped 0.39 percent to close at NT$512.00, and smartphone IC designer MediaTek Inc. ended down 0.36 percent at NT$4,210.00.

Huang said that as funds rotated out of large-cap chip stocks, select smaller electronics component makers benefited, with copper clad laminate (CCL) maker Elite Material Co. soaring 8.35 percent to close at NT$6,165.00 and Taiwan Union Technology Corp. rising 4.69 percent to end at NT$1,675.00

"Rotating interest also focused on certain old economy stocks with 'military concept' stocks in focus," Huang said.

Amid optimism that a drone budget plan worth over NT$60 billion will be approved by lawmakers soon, shares in drone maker Thunder Tiger Corp. surged 10 percent to close at NT$201.50, and fighter jet supplier Aerospace Industrial Development Corp. also jumped 10 percent to end at NT$70.60.

"Due to the large sales contribution from its electronics raw material division, Nan Ya Plastics Corp. surged 10 percent to close at NT$207.50, and affiliate Formosa Plastics Corp. ended up 4.35 percent at NT$60.00.

Boosted by bargain hunting, the financial index rose 0.93 percent as Cathay Financial Holding Co. rose 2.01 percent to close at NT$101.50, and Fubon Financial Holding Co. added 0.78 percent to end at NT$129.50.

"Despite the losses, the Taiex still traded above the 5-day moving average of around 45,500 points, indicating the index has not turned technically weak yet," Huang said. "I think today's downturn was paving the way for a future rebound as the uptrend remained unchanged amid AI enthusiasm."

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$45.35 billion of shares on the main board Friday.