Taiwan shares end lower amid lingering worries over rate hikes

Taiwan shares end lower amid lingering worries over rate hikes

Taipei, April 18 (CNA) Shares in Taiwan finished lower Monday as market sentiment remained cautious due to lingering concerns over move by central banks around the world to tighten monetary policy, dealers said.

Selling was seen across the board, focusing particularly on transportation and financial stocks, while the bellwether electronics sector was somewhat resilient, they said.

The Taiex, the Taiwan Stock Exchange’s weighted index, ended down 105.31 points, or 0.62 percent, at 16,898.87, after moving between 16,845.51 and 16,999.36. Turnover totaled NT$228.8 billion (US$7.82 billion).

The market opened down 0.27 percent but soon rebounded as it tried to recoup its earlier losses. The rebound did not last, however, as selling pressure reemerged, pushing the broader market below the 17,000-point mark by the end of the session, dealers said.

“The failed rebound showed that many investors remained reluctant to buy the dips because of worries over rising interest rates as major central banks aggressively tighten their monetary policies,” Concord Securities analyst Kerry Huang said.

“The yield of the benchmark U.S. 10-year Treasury continues to rise, and many investors worry the uptrend could lead the Federal Reserve to turn more hawkish on interest rates,” Huang said.

Last week, the 10-year Treasury yield rose above 2.83 percent, the highest in three years.

In the old economy sector, the transportation industry, where many major shipping and airline stocks are traded, suffered heavy downward pressure throughout the session and fell 2.70 percent.

Evergreen Marine Corp., the largest container cargo shipper in Taiwan, lost 2.47 percent to close at NT$138.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. ended 2.42 percent and 2.58 percent lower, respectively, at NT$121.00 and NT$151.00.

China Airlines plunged 4.74 percent to close at NT$27.15, and EVA Airways tumbled 5.10 percent to end at NT$34.45.

Elsewhere in the non-tech sector, financial stocks lost 2.05 percent, dealers said.

Fubon Financial Holding Co. lost 1.60 percent to close at NT$73.90, Cathay Financial Holding Co. slid 1.88 percent to end at NT$62.80, CTBC Financial Holding Co. fell 2.04 percent to close at NT$28.75, and Mega Financial Holding Co. ended down 2.22 percent at NT$41.90.

“The bright spot for today was that the electronics sector appeared resilient as many tech heavyweights attracted bargain hunters,” Huang said. “But I think that resilience will be short-lived given the rising interest rates.”

The electronics sector fell 0.11 percent, with the semiconductor sub-index down only 0.08 percent, after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, lost 0.18 percent to close at NT$561.00.

“The stock also moved lower Friday after TSMC gave a rosy picture Thursday of its sales growth for 2022. The losses had nothing to do with its fundamentals as TSMC and its tech counterparts remained bothered by rate hikes,” Huang said.

On Friday, TSMC lost 1.92 percent to push down the Taiex by 1.4 percent, although the chipmaker forecast a day earlier that its sales would grow 25-29 percent in U.S. dollar terms in 2022, and the growth could even top 29 percent.

Among other semiconductor stocks, smartphone chip designer MediaTek Inc. rose 0.12 percent to end at NT$833.00, display driver IC designer Novatek Microelectronics Corp. gained 1.38 percent to end at NT$405.50, and application specific IC Alchip Technologies, Ltd. soared 5.44 percent to end at NT$2,810.00.

Also in the tech sector, United Microelectronics Corp., a smaller contract chipmaker, lost 1.81 percent to close at NT$46.20, and iPhone assembler Hon Hai Precision Industry Co. lost 0.49 percent to end at NT$102.50.

Bucking the downturn on the Taiex, biotech stocks attracted buying on a spike in domestically transmitted COVID-19 cases.

Among them, test kit brand Panion & BF Biotech Inc. and drug supplier Sinphar Pharmaceutical Co. each rose 10 percent, the maximum daily increase, to close at NT$149.50 and NT$36.30, respectively.

“Futures on the U.S. markets are trending lower, pointing to an ugly opening on the spot market later in the day,” Huang said. “U.S. volatility is expected to continue to weigh on shares in Taiwan,” he said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$10.42 billion in shares on the market Monday.

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