Taipei, Feb. 10 (CNA) Shares in Taiwan closed slightly lower Friday as sentiment turned cautious after the U.S. markets gave up their earlier gains overnight amid renewed concerns over an aggressive Federal Reserve, dealers said.
While many stocks across the board largely stayed weak, select large-cap tech and financial stocks appeared resilient, providing some support to the broader market to prevent the main board from further losses, dealers added.
The Taiex, the Taiwan Stock Exchange’s (TWSE) weighted index, ended down 12.06 points, or 0.08 percent, at 15,586.65 after moving between 15,546.11 and 15,628.30. Turnover totaled NT$209.77 billion (US$6.96 billion).
The market opened up 0.18 percent and soon breached the 15,600-point mark to reach the day’s high in the early morning session on a mild technical rebound from a session earlier.
However, selling emerged to push down the main board to negative territory for most of the remaining session.
Investors had been moved by a spike in U.S. treasury yields Thursday when worries over the Fed’s rate hike cycle returned to haunt the markets at home and abroad.
Tech stocks
Despite this, support from contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co. — the top two largest stocks in terms of market capitalization in Taiwan — and certain financial stocks saw the Taiex offset the impact resulting from losses suffered by the old-economy sector.
The electronics sector rose 0.08 percent with the semiconductor subindex rising 0.40 percent.
“Concerns over the next Fed’s move continued to bother investors who witnessed an increase in U.S. treasury yields overnight after some Fed officials still struck a hawkish tone at a time of a strong job market,” Hua Nan Securities analyst Kevin Su said.
Federal Reserve Governor Christopher Waller said that an effort to reach the American central bank’s 2 percent inflation target “might be a long fight.” In addition, New York Fed President John Williams implied further rate hikes may be necessary since as interest rates were “barely in the restrictive territory.”
“With the U.S. markets falling from their highs overnight, investors here appeared reluctant to chase prices despite the initial gains today,” Su said. “Fortunately, TSMC and Hon Hai stayed in positive territory, serving as an anchor to stabilize the broader market.”
TSMC, the world’s largest contract chipmaker, rose 0.93 percent to close at NT$545.00, and its gains offset about 40 points in losses suffered by the Taiex.
Electric vehicle market entrant Hon Hai, also known as Foxconn on the global market, rose 0.50 percent to end at NT$101.50.
“With buying in other electric-vehicle-related stocks fading today, interest rotated to Hon Hai,” Su said.
Among other semiconductor stocks, smartphone IC designer MediaTek Inc. lost 1.20 percent to close at NT$740.00, while United Microelectronics Corp., a smaller contract chipmaker, added 0.50 percent to end at NT$50.80, and IC packaging and testing services provider ASE Technology Holding Co. close unchanged at NT$106.00.
In addition, Global Unichip Corp. (GUC), TSMC’s application-specific integrated circuit (ASIC) design subsidiary, dropped 1.09 percent to end at NT$910.00 as the stock was not added to the MSCI Global Standard Indexes as the market had expected.
Also in the tech sector, Largen Precision Co., a supplier of smartphone lenses to Apple Inc., gained 2.04 percent to close at NT$2,255.00, while flat panel makers AUO Corp. and Innolux Corp. lost 2.83 percent and 2.69 percent, respectively, to end at NT$17.15 and NT$12.65.
Su said the financial sector also outperformed the broader market, up 0.27 percent, on hopes that interest rates will continue to move higher to fight inflation and an interest spread will widen further.
“Taiwan’s January inflation still topped 3 percent and it is possible for the central bank to raise interest rates in the next quarterly policymaking meeting in March,” he said.
Financial, old-economy sectors
In the financial sector, Mega Financial Holding Co. rose 1.56 percent to close at NT$32.60, E. Sun Financial Holding Co. gained 0.41 percent to end at NT$24.70, Cathay Financial Holding Co. added 0.12 percent to close at NT$42.65, but Fubon Financial Holding Co. lost 0.34 percent to end at NT$58.90.
Among the falling old-economy stocks, Tung Ho Steel Enterprise Corp. lost 2.41 percent to close at NT$56.60, Chung Hung Steel Corp. fell 1.06 percent to end at NT$28.10, and China Steel Corp., the largest steel maker in Taiwan, dropped 0.16 percent to close at NT$31.25.
In addition, Taita Chemical Co. shed 2.19 percent to end at NT$22.30, Nan Ya Plastics Corp. fell 0.53 percent to close at NT$74.40, and Formosa Plastics Corp. ended down 0.45 percent at NT$89.10.
The transportation index fell 1.55 percent amid lingering worries over weakening demand for cargo shipping services with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, falling 2.00 percent to close at NT$147.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. shedding 1.78 percent and NT$1.82 percent, respectively, to end at NT$60.60 and NT$75.50.
“Investors had better watch how the U.S. dollar will fluctuate against the Taiwan dollar for more clues about how foreign investors will move their funds as the greenback has showed signs of rebounding amid expectations of additional rate hikes by the Fed,” Su said.
According to the TWSE, foreign institutional investors sold a net NT$156.47 million worth of shares on the main board Friday, when the U.S. dollar rose 0.068 to close at NT$30.136 against the Taiwan dollar.
