Taiwan shares end down on large cap tech stock losses

Taipei-Shares in Taiwan moved lower Wednesday as tech heavyweights, in particular in the semiconductor sector, came under downward pressure, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.

Concerns over the market’s future movement have been on the rise as market sentiment has been hurt in the wake of a large number of short-position futures contracts held by foreign institutional investors, indicating more selling in the spot market, the dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 97.34 points, or 0.6 percent, at 16,215.82, after moving between 16,166.35 and 16,349.21. Turnover totaled NT$311.2 billion (US$10.99 billion).

The market opened down 0.18 points in reflection of a lackluster performance on the U.S. markets, where the Dow Jones Industrial Average fell 0.39 percent but the tech-heavy Nasdaq index rose 0.09 percent overnight, the dealers said.

Selling escalated, especially in the afternoon session, as more and more investors dumped TSMC shares on a day when the stock went ex-dividend, they added.

Moreover, the downward pressure on the chipmaker’s shares was also seen among other tech firms and spread to large cap old economy and financial stocks to send the broader market down by almost 100 points by the end of the session, the dealers said.

After the ex-dividend date, TSMC is scheduled to issue NT$2.5 in cash dividend per share on April 15 for its earnings recorded in the third quarter of last year.

“With the benchmark 10-year U.S. treasury bills on the rise, stocks like TSMC, which have a high valuation, are losing their luster, so many investors appeared reluctant to hold onto the stock for the moment,” Mega International Investment Services Corp. analyst Alex Huang said.

“Moreover, today was the settlement date of March futures contracts, which also sparked selling, as foreign institutional investors simply cut their holdings in the spot market in a bid to profit in futures,” Huang said.

TSMC, the most heavily weighted stock in the local market, fell 1.15 percent to close at NT$604.00, although some bargain-hunting in the late trading session helped the stock come off a low of NT$602.00. Led by TSMC, the electronics sector and the semiconductor sub-index lost 0.64 percent and 1.24 percent, respectively.

Among other losing semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, fell 0.62 percent to end at NT$48.00 and smartphone IC designer MediatTek Inc. dropped 1.20 percent to close at NT$908.00.

Bucking the downturn, driver IC designer Novatek Microelectronics Corp. rose 2.11 percent to end at NT$508.00 on the back of higher product prices.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co, which has entered the electric car market to boost its bottom line, rose 2.44 percent to close at NT$126.00, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., ended unchanged at NT$3,340.00.

“The tech sector was not the only one to face selling today,” Huang said. “Selling was seen almost across the board as market faith was hurt.”

Among the falling old economy stocks, Nan Ya Plastics Corp. lost 1.16 percent to close at NT$76.40 and Formosa Chemicals & Fibre Corp. dropped 1.14 percent to end at NT$86.90 on lower international crude oil prices.

Also sensitive to crude prices, textile brand Far Eastern New Century Corp. lost 1.51 percent to close at NT$29.45 and Eclat Textile Co. fell 1.79 percent to end at NT$467.50.

In the financial sector, which dropped 0.86 percent, Fubon Financial Holding Co. lost 1.62 percent to close at NT$54.50 and Cathay Financial Holding Co. ended down 1.40 percent at NT$45.80.

“Investors should pay close attention to the two-day policy making meeting of the U.S. Federal Reserve (which will be wrapped up early Thursday morning Taipei time) for its outcome,” Huang added.

According to the TWSE, foreign institutional investors sold a net NT$12.93 billion-worth of shares on the main board Wednesday.

Source: Focus Taiwan News Channel