Taipei: Shares in Taiwan closed lower Friday as the market fell into consolidation mode after a recent wild swing amid concerns over massive spending on AI infrastructure, dealers said. The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 170.79 points, or 0.38 percent, at 44,225.91 after moving between 43,941.56 and 44,827.13. Turnover totaled NT$819.20 billion (US$25.43 billion).
According to Focus Taiwan, after a plunge in late July amid worries over an AI bubble, many investors suffered heavy losses, so whenever the Taiex bounced back, they just rushed to pocket gains. Concord Capital Asset Management analyst Lu Chin-wei noted that profit-taking focused on AI-related stocks that had been previously affected by the sell-off. However, TSMC (Taiwan Semiconductor Manufacturing Co.) showed resilience, preventing further losses in the Taiex. TSMC, which accounts for over 40 percent of the exchange's total market value, rose 0.21 percent to close at NT$2,370.00, aided by a 1.01 percent rise in its American depositary receipts (ADRs) overnight.
Despite TSMC's performance, turnover failed to expand, hindering further upward movement with the Taiex in consolidation. Other semiconductor heavyweights faced negative outcomes, with United Microelectronics Corp. down 4.53 percent to NT$116.00, and IC packaging and testing firm ASE Technology Holding Co. ending 1.68 percent lower at NT$585.00.
Electronics component makers also encountered challenges, as Yageo Corp., the world's third-largest multi-layer ceramic capacitor maker, ended down 5.26 percent to NT$540.00, while Delta Electronics Inc. fell 1.79 percent to NT$1,650.00. In addition, iPhone assembler and AI server maker Hon Hai Precision Industry Co. fell 1.70 percent to close at NT$260.00, and Wistron Corp., another AI server maker, closed 3.17 percent lower at NT$183.50.
As the tech sector struggled, investors shifted towards select old economy stocks, particularly in raw materials. Formosa Plastics Corp. rose 1.27 percent to NT$55.80, and Nan Ya Plastics Corp. gained 5.32 percent to end at NT$188.00. China Steel Corp., Taiwan's largest steel maker, added 0.26 percent to NT$19.05, and Tung Ho Steel Corp. rose 2.67 percent to NT$88.50. Paper maker Cheng Loong Corp. rose 2.24 percent to NT$22.80, with rival YFY Inc. ending up 1.65 percent at NT$30.85.
In the financial sector, which rose 0.99 percent due to rotational buying, Cathay Financial Holding Co. rose 1.95 percent to close at NT$99.40, while Fubon Financial Holding Co. ended up 0.79 percent at NT$127.00. Lu advised investors to monitor the U.S. July nonfarm payroll data for further insights into the U.S. economy and Federal Reserve's monetary policy, noting that the data is due out Friday in the U.S.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$40.72 billion in shares on the market Friday.