Shares tumbled on the local bourse yesterday in the wake of overnight losses on US markets amid record high crude oil prices caused largely by geopolitical tension in the Middle East.
The TAIEX shed 139.57 points, or 2.13 percent, to 6,428.03 on turnover of NT$73.58 billion (US$2.25 billion) yesterday, erasing the gains of the past three weeks.
Taiwan Semiconductor Manufacturing Co (台積電) dropped 2.1 percent to NT$55.10 and its closest rival, United Microelectronics Corp (聯電), fell 2.7 percent to NT$18.10. On the main bourse, decliners outnumbered gainers 927 to 89 with 62 stocks unchanged.
Selling pressure came from foreign investors who sold a net NT$18.11 billion yesterday alone, accounting for the bulk of their net sale of NT$25.89 billion this week, according to the Taiwan Stock Exchange's figures.
"The heavy losses in the US markets and elsewhere in Asia coupled with the new high of crude oil prices jointly sent the TAIEX slumping," said Jason Huang (黃崇恩), assistant manager at UOB Investment Advisor (Taiwan) Ltd.
Foreign investors may not regain their confidence any time soon as a result of the poor financial reports that frustrated Wall Street and the upheaval in the Middle East that caused already high energy prices to rocket, Huang said.
The Dow Jones Industrial Average fell by 166.89 points, or 1.52 percent, to 10846.29, while the Standard & Poor's 500 Index declined 16.31 points, or 1.3 percent, to 1242.29 and the NASDAQ Composite Index lost 36.13 points, or 1.7 percent, to 2054.11.
Crude oil for delivery next month gained US$1.70, or 2.2 percent, to a record high US$78.40 a barrel in after-hours electronic trading on the New York Mercantile Exchange as of press time, fueled by Israel's military operations in Lebanon.
The Singaporean investment advisor predicted crude oil prices would rise as high as US$80 per barrel in the near future if the conflict dragged on or escalated with Iran getting involved, Huang said.
This risk coupled with a lack of domestic stimulus due to the low likelihood of the realization of much-anticipated cross-Strait relaxation could continue to overshadow Taiwan's stock market, he said.
The analyst suggested investors remain conservative, as he expected further downturns with the TAIEX dropping as low as 6,100 in coming weeks. Alternatively, they could invest in defensive stocks like financial players or high dividend stocks like China Steel Corp (
Mega Securities Corp (兆豐證券), however, appeared more optimistic, saying that it expected the bearishness to end soon as the financial books to be released next week in the US could not be much worse than the already low expectations.
Mega Securities anticipated a recovery in US markets could trigger a rebound on the local bourse as soon as the latter part of next week, Mega Securities' assistant vice president Alex Huang (
The market watcher predicted the TAIEX would test the high threshold of 6,800 points soon and suggested that investors take a look at high-tech stocks like notebook makers and their component suppliers and light emitting diode manufacturers.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to