Taiwan shares end up as TSMC recoups early losses

Taiwan shares end up as TSMC recoups early losses
Taiwan shares end up as TSMC recoups early losses

Taipei, Feb. 1 (CNA) Shares in Taiwan closed higher Thursday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) recovered from its earlier losses to lend support to the broader market, dealers said.

The bellwether electronics sector largely moved in the doldrum in the wake of the downturn suffered by tech stocks on the US markets overnight as hopes that a rate cut by the Federal Reserve in March were dashed while buying rotated to select large-cap old economy stocks, giving a boost to the main board.

The Taiex, the Taiwan Stock Exchange’s (TWSE) weighted index, ended up 78.55 points, or 0.44 percent, at the day’s high of 17,968.11 after coming off a low of 17,832.95. Turnover totaled NT$306.95 billion (US$9.78 billion).

The market opened down 0.10 and selling increased with large-cap electronics stocks in focus as investors took cues from a 2.23 percent decline on the tech-heavy Nasdaq and a 1.37 percent fall on the Philadelphia Semiconductor Index on Wednesday, when Federal Reserve Chair Jerome Powell poured cold water on hopes of a rate cut cycle starting in March, dealers said.

With the Taiex dipping below 17,900 points at one point, some bargain hunters emerged to take advantage of some tech stocks, which had been battered earlier, and buying in TSMC became more apparent in the last few minutes into the end of the trading session, dealers added.


TSMC, the local market’s most heavily weighted stock, closed unchanged at the day’s high of NT$628.00 after hitting a low of NT$629.00. Led by TSMC, the electronics index rose 0.09 percent with the semiconductor subindex down 0.26 percent to end at 427.35, off a low of 422.55.

“Compared with the US-based chip designers Nvidia Corp. and Advanced Micro Devices, Inc. (AMD), TSMC’s valuation appeared relatively low with a price-to-earnings multiple at only 18 despite its significant gains in recent sessions,” Hua Nan Securities analyst Kevin Su said.

“Many investors have been upbeat about TSMC’s outlook after its sales guidance given at an investor conference (in January),” Su said, referring to the forecast that the chipmaker’s sales will grow 21-26 percent in 2024, beating an earlier market estimate of a 20 percent increase.

Su said the earlier losses made TSMC attractive as its share price moved closer to the nearest technical support around NT$614.00, the intraday low seen on Jan. 19.

Su said he suspected foreign institutional investors and even the government-led funds stood on the buy side to pick up stocks like TSMC as they ignored the losses among US tech stocks hit by the Fed’s comments.

According to the TWSE, foreign institutional investors bought a net NT$21.97 billion of shares on the main board Thursday.

Other tech stocks

Optimism toward TSMC’s outlook led buying to rotate to semiconductor distributors with WT Microelectronics Co. soaring 9.49 percent to end at NT$173.00. In addition, WPG Holdings Ltd., another semiconductor distributor, rose 1.72 percent to close at NT$88.70.

Among other semiconductors stocks, smartphone IC designer MediaTek Inc. loses 3.73 percent to end at NT$930.00, IC packaging and testing services provider ASE Technology Holding Co. fell 2.21 percent to close at NT$133.00, while United Microelectronics Corp., a smaller contract chipmaker, rose 0.10 percent after forecasting on Wednesday that its shipments will grow 2-3 percent sequentially in the first quarter.

Select tech stocks related to artificial intelligence development also attracted bargain hunters with AI server maker Compal Electronics Inc. rising 1.53 percent to close at NT$36.40, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, growing 1.46 percent to end at NT$313.50.

“Buying today also went to certain old economy stocks,” Su said. “The electric machinery industry has benefited from the government’s policies in strengthening the resilience of electricity grid networks around Taiwan and developing green energy.”

In the electric machinery industry, which rose 4.05 percent, Shihlin Electric & Engineering Corp. surged 7.82 percent to close at NT$131.00, and Chung-Hsin Electric & Machinery Manufacturing Corp. gained 5.44 percent to end at NT$126.00.

Fortune Electric Co. secured more buying, soaring 10 percent, the maximum daily increase, to close at NT$488.00, and Luxe Green Energy Technology Co. ended up 1.82 percent at NT$33.65.

Old economy sector

Elsewhere in the old economy sector, Nan Ya Plastics Corp. rose 2.30 percent to close at NT$62.30, Formosa Petrochemical Corp. gained 2.14 percent to end at NT$76.20, Formosa Plastics Corp. added 1.94 percent to close at NT$73.50, and Formosa Chemicals & Fiber Corp. also grew 1.94 percent to end at NT$57.70.

In the financial sector, which rose 0.68 percent, Cathay Financial Holding Co. gained 0.68 percent to close at NT$44.45, and Fubon Financial Holding Co. added 0.47 percent to end at NT$64.80.

“After the Fed’s meeting, investors should put their attention on upcoming US economic data to gauge whether the US economy will have a soft landing,” Su said. “Friday’s job report will be critical.”

(By Pan Chi-yi and Frances Huang)


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