Taipei:Shares in Taiwan closed higher on Wednesday, although they were unable to maintain all of their earlier gains due to profit-taking on Taiwan Semiconductor Manufacturing Co. (TSMC) shares. This occurred ahead of TSMC's investor conference scheduled for Thursday, as noted by market dealers.
According to Focus Taiwan, the Taiex, Taiwan Stock Exchange's benchmark index, rose by 284.52 points, or 0.59 percent, closing at 48,625.83. Throughout the day, it fluctuated between 48,382.64 and 49,059.12, with a total turnover of NT$928.62 billion (US$28.89 billion).
Mega International Investment Services analyst Alex Huang commented that while the index initially rebounded after a significant drop of 1.95 percent on Tuesday, it faced technical resistance once it surpassed 49,000 points. Profit-taking intensified towards the end of the session as TSMC faced increased pressure. Investors were cautious, anticipating announcements at TSMC's upcoming conference.
TSMC, a key supplier of chips for AI applications and accounting for about 40 percent of the market's total value, remained unchanged at NT$2,490.00 after reaching a high of NT$2,535.00. This retreat from the day's peak reduced the Taiex by approximately 360 points. Concerns about returns on AI infrastructure investments, coupled with already high valuations of AI-related semiconductor stocks, have deterred investors from purchasing more shares. Adding to this sentiment, Broadcom CEO Hock Tan likened some AI sector investments to "casino gambling."
Other semiconductor stocks also experienced profit-taking. Nanya Technology Corp.’s shares dropped 1.54 percent to NT$480.50, and MediaTek Inc. fell 1.10 percent to NT$4,475.00. Conversely, ASE Technology Holding Co. saw an increase of 0.95 percent to NT$747.00. Outside of the semiconductor sector, there was stronger buying interest. Hon Hai Precision Industry Co. rose 1.25 percent to NT$243.00, and Lite-On Technology Corp. increased by 2.54 percent to NT$283.00.
The old economy sector drew more interest, particularly petrochemical stocks which continued their momentum from Tuesday. Both Formosa Plastics Corp. and Formosa Chemicals and Fibre Corp. surged 10 percent, the maximum daily increase, closing at NT$88.90 and NT$85.50, respectively, as the petrochemical index rose 6.64 percent. Nan Ya Plastics Corp. rose 9.40 percent to NT$349.00.
The cement sector also saw gains, with TCC Group Holdings Co. rising 2.66 percent to NT$27.05 after its board approved a plan to list shares of its subsidiary, Cimpor International Holdings, abroad. Asia Cement Corp. increased by 1.36 percent to NT$37.30. In the financial sector, Fubon Financial Holding Co. rose 0.31 percent to NT$160.50, while Cathay Financial Holding Co. fell 0.44 percent to NT$114.00.
Huang advised investors to monitor TSMC's investor conference and upcoming U.S. inflation data, which could impact market movements. The Taiwan Stock Exchange reported that foreign institutional investors sold a net NT$20.04 billion worth of shares on the main board on Wednesday.