Taiwanese shares declined yesterday, as investors locked in their gains from the previous session, amid renewed concerns about inflation due to a spike in international crude oil prices, dealers said.
The bellwether electronics sector saw apparent profit taking, with large-cap semiconductor stocks in focus, while financial heavyweights also came under pressure throughout the session, they said.
The TAIEX closed down 132.68 points, or 0.79 percent, at 16,675.09. Turnover totaled NT$252.853 billion (US$8.64 billion), with foreign institutional investors selling a net NT$10.09 billion of shares on the main board, after a net buy of NT$23.26 billion the previous session, Taiwan Stock Exchange data showed.
Photo: CNA
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the local market, led the downturn, falling 1.96 percent to close at NT$549.
On Tuesday, TSMC rose 2.38 percent, driving the TAIEX’s 1.19 percent gain, but its losses yesterday pushed the electronics sector and the semiconductor subindex down by 1.01 percent and 1.46 percent respectively.
“Yesterday’s gains by TSMC and the TAIEX largely reflected the quarterly index adjustments by MSCI Inc,” which went into effect after the market closed on Tuesday, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said. “Today’s retreat came as inflation worries returned to haunt market sentiment.”
After the EU agreed to ban 90 percent of oil imports from Russia, Brent crude futures traded 1 percent higher overnight, raising concerns about inflation and a more hawkish US Federal Reserve, Huang said.
Concerns over an aggressive Fed have been worsening, which helped wipe out the TAIEX’s gains from the previous session, he said.
Yesterday’s profit taking also took a toll on the financial sector, which dropped 1.49 percent, adding to pressure on the TAIEX throughout the session, Huang said.
The petrochemical sector benefited from higher crude prices, rising 0.14 percent, which helped dampen the broader market’s losses.
With the electronics sector in the doldrums, buying rotated to the transportation sector, which rose 1.52 percent.
“Judging from today’s movements, the TAIEX seems to be facing high technical hurdles ahead of the 60-day moving average of 16,836 points,” Huang said. “Investors should pay close attention to the Fed’s next move and how China’s economy will develop after the Shanghai lockdowns are eased.”
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