Shares in Taiwan closed slightly lower Wednesday after coming off an historical intraday high as investors locked in their gains from the first two sessions of 2022, dealers said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which had been a driver of the main board’s gains in the previous two sessions, suffered profit-taking, while buying rotated to select old economy and financial stocks which lent support to the broader market, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 26.39 points, or 0.14 percent, at 18,499.96, after moving between 18,446.52 and 18,619.61. Turnover totaled NT$337.98 billion (US$12.23 billion).
The market opened up 0.39 percent and soon rose to a historical intraday high of 18,619.61 on follow-through buying from a session earlier, when the Taiex increased by 1.40 percent, dealers said.
Selling followed as the Taiex encountered resistance ahead of 18,600 points with TSMC in focus that pushed the main board down to negative territory before last-ditch bargain hunting emerged to cap the downturn by the end of the session, they said.
TSMC, the most heavily weighted stock in the local market, fell by 0.91 percent to close at NT$650.00 after fluctuating between NT$646.00 and NT$669.00. Led by TSMC, the electronics sector fell by 0.31 percent with the semiconductor sub-index down 0.65 percent.
“After two previous high-flying sessions, TSMC took a pause today,” Mega International Investment Services Corp. analyst Alex Huang said. “It was no surprise that the stock saw some profit-taking but the losses were minor, compared with its surge in the two previous sessions.”
In the first two trading sessions of this year, TSMC soared by 6.67 percent on expectations that the chipmaker will announce positive news in an investor conference scheduled for Jan. 13.
On the back of TSMC’s gain, the Taiex rose by 1.69 percent in the two sessions.
“I expect that optimism towards TSMC’s investor conference will continue to result in buying of the stock before Jan. 13, so it is possible for the stock to challenge its historical high of NT$679.00 (as seen on Jan. 21, 2021),” Huang said.
While TSMC retreated, United Microelectronics Corp., a smaller contract chipmaker, rose by 0.16 percent to close at NT$63.10, and smartphone chip designer MediaTek Inc. increased by 0.86 percent to end at NT$1,175.00.
Bucking the downturn, iPhone assembler Hon Hai Precision Industry Co. soared by 5.31 percent to close at NT$109.00 after Google Inc. agreed to invest in its industrial computer subsidiary Ennoconn Corp. through a private placement to become the subsidiary’s third-largest institutional shareholder by taking a 4.6-percent stake.
Ennoconn shares surged 10 percent, the maximum daily increase, to end at NT$276.00 due to Google’s investment at a time when the global tech sector has set its sights on opportunities from the Metaverse concept.
“Hon Hai shares had lagged the electronics sector and the broader market for some time. The deal with Google simply triggered heavy bargain hunting,” Huang said.
Also in the electronics sector, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., fell by 3.15 percent to close at NT$2,610.00 after rising by 7.80 percent a session earlier.
Power management solution provider Delta Electronics Inc. dropped by 2.19 percent to end at NT$290.50.
“As TSMC fell due to consolidation, certain non-tech stocks were boosted by rotational buying throughout the session, with large-cap China Steel Corp. being among those stocks spotlighted today,” Huang said.
In the steel sector, which rose by 0.49 percent, China Steel, the largest steelmaker in Taiwan, rose by 1.16 percent to close at NT$34.85, while Chung Hung Steel Corp. increased by 0.25 percent to end at NT$40.25.
Elsewhere, Formosa Chemicals & Fibre Corp. rose by 0.50 percent to close at NT$80.90, and Formosa Plastics Corp. increased by 0.48 percent to end at NT$105.50.
In addition, China Airlines rose by 2.44 percent to close at NT$27.80, and EVA Airways increased by 0.18 percent to end at NT$27.30.
In the financial sector, which ended up 0.23 percent, Fubon Financial Holding Co. rose by 0.53 percent to close at NT$75.70, while Cathay Financial Holding Co. fell by 0.16 percent to end at NT$61.90.
“Today’s electronics stocks also reflected the losses suffered by U.S. tech stocks overnight due to an increase in the benchmark 10-year treasury yield. So, investors here need to pay close attention to the yield movement amid worries over a rate hike cycle to be launched by the Federal Reserve,” Huang said.
Despite the fall in the Taiex, foreign institutional investors bought a net NT$9.34 billion worth of shares on the main board Wednesday, according to the TWSE.
Source: Focus Taiwan News Channel