Taipei:Shares in Taiwan ended lower on Tuesday as concerns over rising U.S. Treasury yields and international crude oil prices suggested a possible interest rate hike by the Federal Reserve to control inflation.
According to Focus Taiwan, the Taiex, Taiwan Stock Exchange's benchmark index, fell by 392.64 points, or 0.82 percent, closing at 47,631.96 with a trading range between 47,573.09 and 48,045.13. The total turnover reached NT$785.04 billion (US$24.68 billion).
Moore Securities Investment Consulting analyst Adam Lin indicated that the climbing U.S. Treasury yields and crude oil prices increased the likelihood of a Federal Reserve interest rate hike to about 70 percent by October. This pressure affected interest rate-sensitive tech stocks, further impacted by losses in the Tokyo and Seoul markets.
The electronics index dropped 1.02 percent, influencing the Taiex's decline. Notably, MediaTek Inc. fell 7.10 percent to NT$4,910.00, Alchip Technologies Ltd. decreased 3.25 percent to NT$3,685.00, and ASE Technology Holding Co. dropped 1.72 percent to NT$687.00. Despite these declines, Taiwan Semiconductor Manufacturing Co. (TSMC) remained stable, preventing a deeper fall in the index.
TSMC, contributing over 40 percent of the market's total capitalization, ended unchanged at NT$2,475.00 after its American depositary receipts increased by 0.50 percent overnight. Delta Electronics Inc. and Yageo Corp. experienced losses of 3.93 percent and 5.52 percent, respectively, while Hon Hai Precision Industry Co. closed unchanged. Asustek Computer Inc. saw a rise of 1.05 percent, ending at NT$963.00.
Rising crude oil prices benefited petrochemical stocks, with the petrochemical index climbing 1.97 percent. Formosa Petrochemical Corp. surged 8.14 percent to NT$94.30, and Nan Ya Plastics Corp. increased by 3.78 percent to NT$247.00. Meanwhile, Formosa Plastics Corp. and Formosa Chemicals and Fibre Corp. also saw slight increases.
Construction stocks faced declines, with King's Town Construction Co. and Highwealth Construction Corp. dropping 1.72 percent and 2.28 percent, respectively. In the financial sector, Fubon Financial Holding Co. rose 1.00 percent, and Cathay Financial Holding Co. increased by 0.90 percent, outperforming the financial index's 0.54 percent fall.
Lin speculated that local institutional investors might purchase stocks to improve their quarterly reports on the last trading day of the quarter, potentially supporting the Taiex. Foreign institutional investors sold a net NT$63.20 billion worth of shares on the main board on Tuesday, according to the Taiwan Stock Exchange.