Taiwan stocks end lower as turnover slumps

Taipei, June 7 (CNA) Stocks in Taiwan fell on Tuesday amid lingering fears that cash outflows could be triggered by expectations of sustained interest rate hikes by the U.S. Federal Reserve, dealers said.

Turnover remained at the relatively low level seen in recent sessions, which kept large-cap tech stocks in the doldrums, they said.

The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended down 93.08 points, or 0.56%, at 16,512.88, after trading between 16,465.87 and 16,593.75. .

Revenue was NT$187.22 billion (US$6.37 billion), down from NT$216.77 billion on Monday and only the third time in 2022 it has fallen below NT$200 billion. NT dollars. The other two times occurred on May 3 and 4.

The market opened 12.21 points lower and selling rose as investors were unimpressed with the tech-heavy Nasdaq index’s 0.4% gain and 0.05% rise. of the Dow Jones Industrial Average overnight, dealers said.

While selling was seen across the board, the flagship electronics sector led the slowdown, pushing Taiex below 16,500 before some bargain hunters intervened, they said.

“Fears of a hawkish Fed continued to weigh on local equities, particularly after the 10-year US Treasury yield rose above 3% overnight,” said MasterLink Securities analyst Tom Tang.

“Many investors remained reluctant to buy the dips as they feared that US markets would face more volatility.”

Tang said Tuesday’s weak earnings reflected investor concerns about a potentially more aggressive rate-hike cycle from the Fed after stronger-than-expected U.S. jobs data for May. published last week.

“With declining liquidity, it has not been easy for tech heavyweights to break out of their current weakness,” Tang said, referring to stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. .(TSMC).

Taiex’s most weighted stock, TSMC, fell 0.93% to close at NT$535.00 from a low of NT$532.00. TSMC’s losses led the electronics sector and the semiconductor sub-index down 0.78% and 0.93%, respectively.

TSMC has scheduled an annual general meeting on Wednesday, which will be watched closely by investors seeking insight from company management on the business climate and TSMC’s expansion plans.

Among other semiconductor stocks, United Microelectronics Corp., a small contract chipmaker, fell 0.58% to close at NT$51.70, and smartphone IC designer MediaTek Inc. lost 1.66% to close at NT$890.00.

Against the recession, Asmedia Technology Inc., a designer of high-speed surface integrated circuits, rose 1.81% to end at NT$1,405.00.

Although Apple Inc. unveiled new MacBooks, the iOS 16 operating system and more at its Worldwide Developers Conference (WWDC) overnight, local Apple supply chain inventory has always been under pressure, dealers said.

iPhone maker Hon Hai Precision Industry Co. fell 1.73% to close at NT$113.50, and Largan Precision Co., a smartphone camera lens supplier to Apple, lost 2 .21% to close at NT$1,770.00.

“With rising inflationary pressures around the world, demand for consumer electronic gadgets has weakened,” Tang said. “Last WWDC failed to generate buying for these concept shares of Apple today.”

Elsewhere, many old economy stocks, especially large caps, also fell.

The textile brand Far Eastern New Century Corp. closed down 0.32% at NT$30.70, and Eclat Textile Co. fell 0.78% to close at NT$507.60.

Formosa Plastics Corp. lost 1.38% to close at NT$107.00, and food brand Uni-President Enterprises Corp. lost 0.61% to close at NT$64.80.

“Right now, tourism stocks are looking attractive in hopes that the government will ease border controls soon. Today, the buying shifted to some tourism stocks,” Tang said.

Among them, The Ambassador Hotel Ltd. gained 0.16% to close at NT$31.80, Formosa International Hotels Corp. rose 0.85% to close at NT$179.00, and FarGlory Hotel Co. gained 1.25% to close at NT$36.50.

But Lion Travel Service Co. lost 0.96% to end at NT$103.50.

In the financial sector, which lost 0.54%, Cathay Financial Holding Co. closed unchanged at NT$54.80, while Fubon Financial Holding Co. lost 0.94% to close at NT$63.40.

“Ahead of the Fed’s next policy-making meeting next week (June 14-15), the local market should continue to consolidate, with many foreign institutional investors likely to sideline or stand on the selling side,” Tang said. .

According to the TWSE, foreign institutional investors sold a net amount of NT$15.92 billion in shares in the market on Tuesday.

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