Taipei: Shares in Taiwan ended slightly lower on Monday, despite a late-stage recovery led by Taiwan Semiconductor Manufacturing Co. (TSMC), which managed to recoup most of its initial losses thanks to its robust fundamentals. According to Focus Taiwan, the Taiex demonstrated strong technical support, bouncing back above the five-day moving average of 23,363 points by the session's end. The Taiwan Stock Exchange's benchmark weighted index concluded the day down by 24.25 points, or 0.10 percent, standing at 23,529.64 after fluctuating between 23,306.66 and 23,563.80. The total turnover for the day was NT$355.57 billion (US$11.02 billion). The trading session commenced with a 0.32 percent decline, hitting a low shortly after 10 a.m. due to a downturn in semiconductor stocks, influenced by a 0.82 percent drop in the Philadelphia Semiconductor Index the previous Friday. However, TSMC attracted bargain hunters when its stock tested its five-day moving average of NT$1,070.00. Other significant players, like smart phone IC designer MediaTek Inc., demonstrated resilience, aiding the broader market's rebound, which allowed the market to close above 23,500 points. TSMC closed at NT$1,085.00, down 0.46 percent, after reaching a low of NT$1,070.00. "Due to its heavy weighting, TSMC continued to dictate the local market's movement," noted Cathay Futures Consultant analyst Tsai Ming-han. He mentioned that TSMC's initial downturn was a reflection of the semiconductor sector's weakness at the end of the previous week and reports of the U.S. Department of Commerce's directive to TSMC to halt shipments of 7 nanometer chips or below to China. Despite these challenges, Tsai emphasized TSMC's strong fundamentals, citing the company's record high October sales of NT$314.24 billion, a 29.2 percent increase year-on-year. "To my knowledge, TSMC stopped selling chips made on the 7nm process to China before the report surfaced," Tsai added, indicating that the report had only a temporary impact on TSMC's share price. As TSMC faced earl y selling pressure, investors rotated their buying to other semiconductor stocks. MediaTek saw a rise of 1.17 percent, ending at NT$1,295.00, while ASE Technology Holding Co., an IC packaging and testing services provider, gained 1.29 percent to close at NT$157.50. However, United Microelectronics Corp., a smaller contract chipmaker, decreased by 0.21 percent, closing at NT$46.55. Investors also turned their attention to large-cap tech stocks outside the semiconductor industry. Hon Hai Precision Industry Co., known for assembling iPhones and producing AI servers, rose by 0.92 percent to NT$220.00, while Delta Electronics Inc., a power management solutions provider, slightly increased by 0.25 percent to NT$401.00. Conversely, AI server supplier Quanta Computer Inc. and rival Wistron Corp. saw declines of 0.91 percent and 1.21 percent, closing at NT$325.00 and NT$122.00, respectively. In the old economy sector, performance was mixed. The construction and transportation sectors outperformed the broader market, gaining 2.08 percent and 1.13 percent, respectively. Tsai noted that the construction industry's gains were technical, following significant recent losses. Prominent performers in the construction sector included King's Town Construction Co., which rose 5.96 percent to NT$80.00, Huaku Development Co. with a 4.76 percent increase ending at NT$121.00, Kindom Development Co. up 4.23 percent to NT$51.70, and Highwealth Construction Corp., which rose 3.50 percent to NT$42.90. The transportation sector, which increased by 1.13 percent, saw Evergreen Marine Corp., Taiwan's largest container cargo shipper, rise by 1.15 percent to NT$220.50, with Wan Hai Lines Ltd. gaining 0.64 percent to end at NT$23.40. Tsai expressed a preference for airline stocks over shipping stocks due to rising demand for air cargo services to transport tech gadgets, including chips. EVA Airways saw a 2.21 percent increase to NT$39.25, while China Airlines rose by 1.08 percent to NT$23.40. In other areas of the old economy sector, textile b rand Far Eastern New Century Corp. fell by 2.74 percent to NT$25.45, whereas Makalot Industrial Co., another textile manufacturer, rose by 1.33 percent to NT$244.00. The financial sector experienced a 0.22 percent decline, with Fubon Financial Holding Co. and Cathay Financial Holding Co. decreasing by 1.29 percent and 1.15 percent, closing at NT$91.70 and NT$68.70, respectively. "As long as TSMC continues to ride its sound fundamentals, the Taiex could challenge its historical intraday high of 24,416 points seen on July 11," Tsai commented. According to Taiwan Stock Exchange, foreign institutional investors sold a net NT$172 million in shares on the market Monday.
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