The TAIEX closed lower yesterday after fluctuating in consolidation mode ahead of the release of US job data later in the day.
Dealers reported that investors, awaiting clues from the upcoming job report, held off during the session, despite reduced fears after US Federal Reserve Chairman Jerome Powell struck a softer tone earlier this week.
The TAIEX ended down 0.28 percent at 14,970.68, with turnover totaling NT$223.1 billion (US$7.3 billion), lifting the TAIEX to end the week up 192.17 points from 14,778.51 points on Friday last week.
Investors took cues from a lackluster showing on the US markets, where the Dow Jones Industrial Average lost 0.56 percent and the tech-heavy NASDAQ Composite Index rose only 0.13 percent overnight ahead of the release of the US nonfarm payroll report for last month.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the market’s most heavily weighted stock, came under pressure along with other semiconductor heavyweights.
iPhone assembler Hon Hai Precision Industry Co (鴻海精密) — second to TSMC in terms of market capitalization posted — lent some support to the broader market.
“Market sentiment seemed to have improved in recent sessions after Powell’s speech on Wednesday,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “Still, before the job data, many investors preferred to take a pause after yesterday’s rally.”
On Wednesday, Powell said the pace of interest rate increases would likely slow in the current rate hike cycle, potentially starting this month.
However, Powell cautioned that the Fed’s monetary policy was likely to stay tight for some time until signs of progress on inflation emerged.
“Since the beginning of November, the TAIEX has gained significantly, and it was no surprise that caution set in before the job data is out amid fears over a possible technical pullback,” Su said.
Before yesterday, the local main board had moved up by 2,063.05 points, or 15.93 percent, since the beginning of last month.
“TSMC fell victim to profit-taking, but fortunately, Hon Hai and its subsidiaries scored gains to offset the losses suffered by the semiconductor industry. This was due to optimism toward the company’s efforts in developing the electric vehicle business to diversify its product portfolio,” Su said.
Outperforming the broader market, Hon Hai, also known as Foxconn (富士康), gained 2.43 percent to close at NT$105.50.
At the other end of the market, TSMC lost 1.20 percent to close at NT$492.50, as the stock faced stiff technical resistance ahead of the NT$500,00 mark.
Bucking the downward trend, power management integrated circuit designer Silergy Corp (矽力杰) soared 10 percent to close at NT$544.00, and Powerchip Semiconductor Manufacturing Corp (力積電), another smaller contract chipmaker, rose 1.76 percent to end at NT$34.60.
Foreign institutional investors sold a net NT$50.52 million worth of shares on the main board yesterday, the Taiwan Stock Exchange said.
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