Taipei: The Taiwan dollar showed signs of stabilizing Tuesday, but shares in Taiwan still closed slightly lower as investors remained concerned over possible American tariffs on semiconductor imports, dealers said. The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended down 10.40 points, or 0.05 percent, at 20,522.59 after moving between 20,349.56 and 20,623.85. Turnover totaled NT$302.92 billion (US$10.04 billion).
According to Focus Taiwan, after opening down 179.11 points, the market rallied and rose to the day’s high just before noon. However, selling set in and escalated late in the trading session, with large cap semiconductor stocks in focus, pushing the Taiex into negative territory. “The initial gains came after the Taiwan dollar stabilized, leaving rapid appreciation against the greenback behind,” Mega International Investment Services analyst Alex Huang said. Investors found some relief after the central bank, Taiwan’s largest currency market player, indicated that volatility had subsided.
The U.S. dollar had plunged 6.21 percent on Friday and Monday, triggering a sell-off on the stock market due to concerns over potentially significant foreign exchange losses for Taiwanese exporters. However, reversing its steep fall in the previous two sessions, the greenback rose NT$0.135 Tuesday to close at NT$30.280. “But, possible tariffs on semiconductors returned to hurt sentiment. So TSMC (Taiwan Semiconductor Manufacturing Co.) came under pressure, dragging the broader market lower,” Huang added.
Contract chipmaker TSMC, the most heavily weighted stock in Taiwan, lost 1.92 percent to close at NT$920.00. Its losses resulted in the electronics index dropping by 0.50 percent and the semiconductor sub-index falling by 1.49 percent. Among other semiconductor stocks, smartphone IC designer MediaTek Inc. fell 1.16 percent to NT$1,280.00, and Global Unichip Corp., TSMC’s application-specific integrated circuit (ASIC) design subsidiary, shed 3.59 percent to close at NT$1,075.00. However, IC packaging and testing services provider ASE Technology Holding Co. rose 1.87 percent to NT$136.50, bucking the downturn.
A stable Taiwan dollar attracted buying interest in tech hardware suppliers. iPhone assembler and artificial intelligence server maker Hon Hai Precision Industry Co. closed 2.46 percent higher at NT$146.00, and Quanta Computer Inc., another AI server supplier, rose 3.04 percent to NT$254.00. The currency issue also lent support to the financial sector, which rose 1.21 percent, as concerns eased over a decline in the value of insurance companies’ assets in foreign markets.
Cathay Financial Holding Co. gained 2.19 percent to close at NT$55.90, and E. Sun Financial Holding Co. added 2.69 percent to NT$28.60, while Fubon Financial Holding Co. lost 1.25 percent to NT$79.00. Airline stocks benefited from a higher Taiwan dollar, potentially encouraging local consumers to travel overseas. China Airlines rose 3.15 percent to NT$22.90, EVA Airways gained 5.35 percent to NT$43.35, and Tigerair Taiwan soared 10 percent, the maximum daily increase, to NT$103.50.
“In addition to the currency issue, investors should follow the Federal Reserve policymaking meeting (slated to open later in the day),” Huang noted. According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$15.75 billion in shares on the market Tuesday.