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Stocks dip slightly in wake of US Fed's rate increase

Shares ended slightly lower yesterday after an interest rate hike in the US raised concerns over rising corporate borrowing costs and foreign fund outflows, analysts said.

The TAIEX finished 14.54 points, or 0.2 percent, lower at 5,803.68. Overall dealings were valued at NT$52.6 billion (US$1.68 billion).

Decliners far outnumbered advancers 624 to 220, while 161 issues ended the day completely unchanged.

"Taiwan's central bank will likely follow in the footsteps of the Fed, which will raise businesses' cost of borrowing money," said Margaret Pan, a senior vice president at Capital Securities (群益證券).

Higher interest rates may spur foreign fund outflows from Taiwan as investors seek higher returns in the US, Pan said.

The technology sector was mixed, with losses by some makers of liquid crystal display panels offsetting gains by contract chipmakers.

Flat-panel maker HannStar Display Corp (瀚羽彩晶) ended 3.1 percent lower at NT$8.98. Larger rival Chi Mei Optoelectronics Corp (奇美電子) was down 1 percent at NT$50.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest maker of made-to-order chips, rose 0.4 percent to NT$52.50, while rival United Microelectronics Corp (UMC, 聯電) added 0.5 percent to NT$18.50.

Johnny Lee, an analyst at President Securities (統一證券), said buying interest in technology heavyweights like TSMC and UMC rose, partly "because of attractive valuations and as uncertainty about their first-quarter earnings eases."
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