Taipei, Oct. 16 (CNA) Shares in Taiwan moved lower and closed below 16,700 points Monday with sentiment hurt by escalating military conflict between Israel and the militant group Hamas, which pushed up crude oil prices at the end of last week, dealers said.
With funds flocking to U.S. dollar-denominated assets for hedging purposes, large-cap tech stocks, led by the semiconductor industry came under heavier pressure, leading the broader market to trend lower throughout the session, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 130.33 points, or 0.78 percent, at 16,652.24 after moving between 16,614.10 and 16,712.93. Turnover totaled NT$234.43 billion (US$7.26 billion).
The market opened down 0.41 percent and selling quickly increased, pushing the bellwether electronics sector down with semiconductor heavyweights, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) in focus in the wake of a 1.23 percent decline on the tech-heavy Nasdaq index and a 2.70 percent fall on the Philadelphia Semiconductor Index on U.S. markets Friday, dealers said.
The financial sector bucked the downturn lending some support to the broader market, but the Taiex still ended below the 16,700 point mark and even below the nearest technical support at around 16,687 points, the 60-day moving average, by the end of the trading session, dealers added.
“The spike in crude oil prices raised worries over inflation, which prompted investors at home and abroad to move their money to greenback-denominated assets,” equity market analyst Andy Hsu said. “I suspect foreign institutional investors stood on the sell side today by trimming their holdings in large-cap tech stocks.”
According to the TWSE, foreign institutional investors sold a net NT$15.66 billion worth of shares on the main board Monday.
Tech sectors
“TSMC, again, became the top target of foreign institutional selling, ahead of an investor conference scheduled for Thursday,” Hsu said. “Investors just waited for TSMC’s guidance for the fourth quarter after inventory adjustments in the first nine months of this year.”
TSMC, the most heavily weighted stock on the local market, fell 1.45 percent to close at NT$545.00. TSMC’s losses contributed about 67 points to the Taiex’s decline, and pushed the electronics index and the semiconductor sub-index down by 1.17 percent and 1.24 percent, respectively.
Among other semiconductor stocks, IC packaging and testing services provider ASE Technology Holding Co. lost 0.43 percent to end at NT$116.00, and smartphone IC designer MediaTek Inc. closed down 0.24 percent at NT$840.00, while Global Unichip Corp., TSMC’s application-specific integrated circuit (ASIC) design subsidiary, rose 1.18 percent to end at NT$1,715.00.
In addition, Alchip Technologies Ltd., another ASIC designer, lost 0.90 percent to close at NT$2,745.00, while United Microelectronics Corp., a smaller contract chipmaker, rose 0.32 percent to end at NT$47.15.
Tech stocks related to artificial intelligence development continued their weakness due to disappointing sales in September, which sent the computer and peripheral sub-index down by 1.62 percent.
Shares in Quanta Computer Inc., a major AI server maker, fell 1.99 percent to close at NT$221.50, and rival Wistron Corp. lost 1.11 percent to end at NT$98.00. In addition, Inventec Corp., another AI server supplier, shed 2.43 percent to close at NT$46.20, and Wiwynn Corp., Wistron’s cloud application subsidiary, shed 3.34 percent to end at NT$1,590.00.
“Although their weakness Monday moderated from the previous sessions, these stocks are expected to continue to consolidate for some time to digest additional selling,” Hsu said.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 0.47 percent to close at NT$107.00, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., shed 2.30 percent to end at NT$2,125.00.
Financial stocks
However, the financial sector rose 0.32 percent with select government-invested stocks moving higher, in particular in the late trading session, dealers said.
“I guess buying largely came from government-led funds as authorities simply did not want to see the Taiex fall further and gave a boost to financial stocks to assuage the impact on their tech counterparts,” Hsu said.
Among government-invested financial stocks, Mega Financial Holding Co. rose 0.78 percent to close at NT$38.80, and Taiwan Cooperative Financial Holding Co. gained 0.77 percent to end at NT$26.15. Buying was also seen among non-government invested financial stocks with Cathay Financial Holding Co. up 0.44 percent to close at NT$45.50, and Fubon Financial Holding Co. up 0.16 percent to end at NT$61.00.
Airlines, shipping, steel
In the old economy sector, the transportation industry suffered steeper losses, down 1.43 percent. In the industry, China Airlines lost 4.31 percent to close at NT$20.00, and EVA Airways fell 4.18 percent to end at NT$27.50. In addition, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, dropped 0.95 percent to close at NT$104.00, but rival Wan Hai Lines Ltd. rose 1.69 percent to end at NT$45.00.
Elsewhere in the old economy sector, China Steel Corp., the largest steel maker in Taiwan, lost 0.40 percent to close at NT$24.75, and China Steel Structure Corp. fell 1.51 percent to end at NT$52.30, while Longchen Paper & Packaging Co. moved higher by 2.08 percent to close at NT$14.70 on bargain hunting.
“Investors had better watch closely how the Israel-Hamas war develops,” Hsu said. “If the conflict doesn’t slow down anytime soon, the global economy is likely to face more challenges amid growing oil prices.”
After the Taiex fell below the 60-day moving average, the index could test 16,300 points in the near future, he added.
