Taipei: Shares in Taiwan closed lower on Monday, reversing earlier gains as concerns about a possible major pullback following recent strong gains prompted many investors to stay on the sidelines, leading to reduced turnover, dealers said. The Taiex, Taiwan Stock Exchange's benchmark index, ended down 461.97 points, or 1.02 percent, at 44,762.32 after fluctuating between 44,761.88 and 45,362.30. Turnover totaled NT$629.43 billion (US$19.79 billion), down from NT$754.90 billion on Friday.
According to Focus Taiwan, the Taiex had surged 5,290.99 points, or over 13 percent, since the latest technical rebound at the end of July, before Monday's downturn. Tony Huang, an analyst at Taishin Securities Investment Advisory, noted that profit-taking followed the main board's early gains. Amid caution, many investors opted to remain on the sidelines, contributing to the decreased turnover.
Selling was concentrated on large-cap tech stocks after the Taiex breached the 46,000-point mark and approached the next technical resistance range between 46,000 and 48,000. The bellwether electronics index fell 0.99 percent, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) dropping 1.45 percent to NT$2,375.00, costing the Taiex approximately 280 points from the day's high.
Other semiconductor stocks that reversed earlier gains included memory chip supplier Nanya Technology Corp., which shed 5.11 percent to end at NT$501.00, and smartphone IC designer MediaTek Inc., which lost 0.66 percent to NT$3,765.00. However, ASE Technology Holding Co., an IC packaging and testing services provider, ended up 0.85 percent at NT$592.00.
In the tech sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. dropped 0.81 percent to NT$243.50, while power management solution provider Delta Electronics Inc. rose 1.09 percent to NT$325.00. Nontechnology stocks largely mirrored the broader market's movement.
Reacting to the losses of its subsidiary Nanya Technology, Nan Ya Plastics Corp. fell 6.25 percent to NT$180.00, and affiliate Formosa Plastics Corp. slid 4.04 percent to NT$59.00. China Motor Corp. decreased 1.45 percent to NT$54.30, and Yulon Nissan Motor Corp. dropped 0.10 percent to NT$49.00.
However, China Airlines rose 0.49 percent to NT$20.50, and EVA Airways ended up 0.12 percent at NT$42.65, buoyed by optimism over summer vacation demand. In the financial sector, which fell 1.35 percent, Fubon Financial Holding Co. lost 1.49 percent to NT$132.00, and Cathay Financial Holding Co. ended down 1.59 percent at NT$98.90. E. Sun Financial Holding Co., however, closed up 0.39 percent at NT$38.15.
Huang advised investors to monitor the upcoming Nvidia Corp. earnings report, due Wednesday U.S. time, for further insights into the AI outlook. According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$15.75 billion of shares on the main board Monday.