Local shares on Friday took a beating, with the bellwether electronics sector in focus, pushing down the benchmark index to a level close to the nearest technical support of about 11,100 points, dealers said.
Following losses sustained by the tech-heavy NASDAQ, investors rushed to dump large-cap electronics stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and iPhone assembler Hon Hai Precision Industry Co (鴻海精密), they said.
The TAIEX on Friday closed down 95.33 points, or 0.85 percent, at 11,156.42, after moving between 11,122.98 and 11,243.59, on turnover of NT$161.01 billion (US$5.4 billion).
Friday’s closing level was below the five-day moving average of about 11,160 points, but was a 1.9 percent increase from a close of 11,156.42 a week earlier.
The market opened down 8.16 points and stayed below the previous close as the electronics sector was in the doldrums in the wake of the falling NASDAQ, which fell 0.7 percent overnight, dealers said.
Selling became more pronounced in the afternoon session, pushing the TAIEX down by more than 100 points at one point, led by TSMC, Hon Hai and other tech stocks, before bargain hunters emerged in the late trading session to recoup some of the losses by the end of the day, they said.
“After yesterday’s gains when the local main board moved closer to the intraday high of 11,270 points [on Jan. 23], many investors turned cautious about an immediate possible major pullback,” KGI Securities Co (凱基證券) analyst Phil Chu (朱有志) said.
“In particular, after witnessing the NASDAQ weaken overnight, local investors scrambled to cut their holdings in large-cap electronics and retain as much cash as possible in a bid to avoid further possible losses down the road,” Chu said.
“I think foreign institutional investors stood on the sell side,” he added.
Foreign institutional investors on Friday sold a net NT$3.92 billion of shares on the main board, Taiwan Stock Exchange data showed.
TSMC, the most heavily weighted stock on the local market, fell 1.30 percent to close at NT$227 with 23.52 million shares changing hands.
Led by TSMC, the bellwether electronics sector ended down 1.18 percent.
Among other falling tech heavyweights, Hon Hai, second to TSMC in terms of market value, shed 3.18 percent to close at NT$88.30, although its subsidiary Foxconn Industrial Internet Co Ltd (FII, 富士康工業互聯網) had a strong showing on the first day of its listing on the Shanghai Stock Exchange.
“It is possible for foreign investors to sell Hon Hai to buy FII today,” Chu said.
Also in the electronics sector, shares in Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, lost 2.15 percent to close at NT$4,545, while Pegatron Corp (和碩), another iPhone assembler, rose 0.15 percent to end at NT$67.90 on reports that it would secure orders to assemble new, larger LCD screen iPhones.
Selling spread to non-high-tech stocks, although the financial sector remained resilient, falling only 0.27 percent, Chu said.
Cathay Financial Holding Co (國泰金控), one of the nation’s leading financial holding firms, ended unchanged at NT$55 after the company reported an almost 70 percent year-on-year increase in net profit for the first five months of this year.
In the old economy sector, shares in Nan Ya Plastics Corp (南亞塑膠) fell 1.61 percent to close at NT$108.50, Formosa Plastics Corp (台灣塑膠) lost 1.36 percent to end at NT$85.50 and food conglomerate Uni-President Enterprises Corp (統一企業) dropped 0.66 percent to close at NT$75.
“As the TAIEX fell below the five-day moving average today, it needs time to digest downward pressure and consolidate,” Chu said.
Elsewhere in Asia on Friday, markets retreated at the end of a broadly positive week, with traders turning their attention to a G7 summit on fears that world leaders would clash with US President Donald Trump over his latest tariff provocations.
While there remained concerns about a possible trade war and other geopolitical issues, equities have enjoyed a positive run since a strong US jobs report on Friday last week that fueled optimism in the global outlook.
The Nikkei 225 on Friday ended down 128.76 points, or 0.6 percent, at 22,694.50, with dealers unmoved by news confirming that Japan’s economy shrank for the first time in two years in the January-to-March period. That was a 2.4 percent increase from a close of 22,171.35 on June 1.
Hong Kong’s Hang Seng on Friday sank 554.42 points, or 1.8 percent, to 30,958.21 after a six-day winning run, rising 1.5 percent from 30,492.91 a week earlier.
The Shanghai Composite on Friday slipped 42.35 points, or 1.4 percent, to 3,067.15, despite forecast-beating trade data. That was a drop of 0.3 percent from 3,075.14 on Friday last week.
Seoul’s KOSPI on Friday fell 19 points, or 0.8 percent, to 2,451.58, but rose 0.5 percent from a close of 2,438.96 a week earlier.
Sydney lost 0.2 percent and Singapore was down 1 percent, while Manila and Jakarta were sharply lower.
“Usually [a G7 summit is] a nonevent for markets, but with all the focus on escalating trade tensions amongst long-standing allies, there’s a good reason for investors to be chary, as this meeting is unlikely to follow an orderly arrangement of discussion,” Oanda Corp head of Asia-Pacific trade Stephen Innes said.
“Even more so as Canada and Mexico have retaliated against a range of US exports and the EU has promised to do so as well,” he added.
However, there was hope for China-US trade talks after they reached a deal allowing Chinese telecom equipment maker ZTE Corp (中興通訊) to pay a US$1.4 billion fine instead of being hit by a seven-year ban on selling to US firms.
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Huawei Technologies Co’s (華為) latest smartphones carry a version of the advanced made-in-China processor it revealed last year, results from an independent analysis showed. This underscored the Chinese company’s ability to sustain production of the controversial chip. The Pura 70 series unveiled last week sports the Kirin 9010 processor, research firm TechInsights found during a teardown of the device. This is a newer version of the Kirin 9000s, made by Semiconductor Manufacturing International Corp (SMIC, 中芯) for the Mate 60 Pro, which had alarmed officials in Washington who thought a 7-nanometer chip was beyond China’s capabilities. Huawei has enjoyed a resurgence since
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li