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Taiwan Shares End Little Changed Ahead of U.S. Inflation Data Release

Shares in Taiwan closed almost flat Wednesday with earlier gains eroded as investors appeared to remain cautious ahead of the release of the August U.S. consumer price index (CPI), which could influence the Federal Reserve’s decision regarding its monetary policy.

The bellwether electronics sector came off a high as “Apple concept stocks” came under pressure, despite the U.S. electronics giant unveiling the latest iPhone 15 series overnight, while buying switched to select old economy stocks.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 8.80 points, or 0.05 percent, at 16,581.51 after moving between 16,542.72 and 16,653.30. Turnover totaled NT$252.62 billion (US$7.89 billion).

The market opened up 5.42 points higher and soon hit its daily high of about 80 points, led by the electronics industry in the early morning session due to follow-through buying from Tuesday, when the Taiex gained 0.85 percent.

But, with the Taiex breaching 16,600 points at one point, some investors began selling, forcing large-cap tech stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), to give up their earlier gains, capping the upturn on the broader market by the end of the session.

“Market sentiment turned cautious ahead of the U.S. August CPI that is set to be released today,” Moore Securities Investment Consulting Co. analyst Adam Lin said. “Fears over rising inflationary pressure in the U.S., the world’s largest economy, following a spike in crude oil prices prompted investors to pocket earlier gains.”

Lin said the electronics industry had fallen victim to profit-taking, led by large-cap semiconductor stocks, particularly TSMC.

Tech stocks

After hitting its daily high of NT$548.00, TSMC, the most heavily weighted stock in the local market, lost 0.55 percent to close at NT$541.00. Led by TSMC’s losses, the electronics index fell 0.15 percent to close at 809.94, off a high of 815.56, while the semiconductor sub-index ended down 0.22 percent at 367.48, coming off a high of 370.78.

“TSMC’s initial gains resulted from its decision to invest in U.K. headquartered IC designer ARM Holdings as well as buying from certain investors to boost the spot market in a bid to profit in futures and options. But the gains gave way to the U.S. CPI concerns,” Lin said.

TSMC announced Tuesday that it will spend up to US$100 million investing in an initial public offering planned by U.K.-headquartered IC designer ARM Holdings, which is owned by Japan’s Softbank Group.

Among other semiconductor heavyweights, IC packaging and testing services provider ASE Technology Holding Co. lost 2.60 percent to end at NT$112.50, while United Microelectronics Corp., a smaller contract chipmaker, rose 0.64 percent to close at NT$47.10 but came off a high of NT$47.40.

The gains enjoyed by highly-priced IC stocks remained solid with Alchip Technologies, Ltd., an application-specific integrated circuit (ASIC) designer, up 3.56 percent to end at NT$2,620, and Global Unichip Corp., TSMC’s ASIC design subsidiary, gaining 5.42 percent to close at NT$1,460.00.

New iPhone 15 series

“Several foreign brokerages have lowered their forecasts of iPhone shipments for this year, which led to dampened sentiment toward the so-called Apple concept stocks, which dealt another blow to the Taiex, despite the U.S. tech giant introducing the new iPhone 15 series overnight,” Lin said.

Among the major suppliers to Apple, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 1.40 percent to end at NT$106.00, while Largan Precision Co., a smartphone camera maker, shed 1.71 percent to close at NT$2,015.00, and rival Genius Electronic Optical Co. fell 2.32 percent to end at NT$379.00.

Old economy stocks

In the wake of the tech sector’s weakness, investors tended to park their money in old economy and financial stocks, dealers said.

With global oil prices rising above US$92 a barrel overnight for the first time in nearly 10 months, the petrochemical industry rose 0.56 percent. In the industry, Formosa Petrochemical Corp. gained 1.35 percent to close at NT$82.60, and Taita Chemical Co. grew 2.24 percent to end at NT$18.25.

Elsewhere in the old economy sector, Shihlin Paper Corp. gained 3.36 percent to close at NT$61.60, and Longchen Paper & Packaging Co. added 1.02 percent to end at NT$14.80.

In the financial sector, which rose 0.23 percent, Cathay Financial Holding Co. gained 0.21 percent to close at NT$46.75, and Fubon Financial Holding Co. ended up 0.48 percent at NT$62.40.

According to the TWSE, foreign institutional investors shifted to the sell side and recorded a net sell of NT$1.84 billion worth of shares on the main board Wednesday after a net buy of NT$8.43 billion Tuesday.

Source: Focus Taiwan