Taiwan stocks fall on US losses amid rate hike fears

Taipei, June 21 (CNA) Taiwan stocks were beaten on Monday as investors reacted to heavy losses in US markets late last week over concerns that the US Federal Reserve would raise interest rates more sooner than expected, brokers said.

The benchmark electronics sector came under strong downward pressure, dragging the Taiex down, while the shipping and paper industries outperformed the overall market on a cyclical recovery, they said. .

The Taiex, the weighted benchmark of the Taiwan Stock Exchange (TWSE), ended down 255.56 points, or 1.48%, at 17,062.98, after moving between 17,023.31 and 17 305.49. The turnover amounted to NT $ 510.69 billion (US $ 18.27 billion).

The market opened 0.08% lower and sales accelerated quickly after the Dow Jones Industrial Average fell 1.6% on Friday.

Market sentiment at home and abroad weakened after St. Louis Fed Chairman James Bullard predicted on Friday that the U.S. Fed would begin a rate hike cycle as early as 2022, before the end 2023 mentioned in a Fed press release on June 16, dealers said.

Bullard’s comments have touched the nerves of many investors in global financial markets. After the Fed’s hawkish tone, markets around the world expect central banks to hike rates twice by the end 2023, “said Kerry Huang, analyst at Concord Securities.

“The markets in Taiwan and the region couldn’t help but feel the effects of the lower Dow Jones,” Huang said, referring to the losses suffered by the Tokyo and Hong Kong markets.

In Taiwan, he said, investors have locked in on recent gains in the semiconductor industry, particularly in contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC).

TSMC, the most weighted stock in the local market, lost 3.32% to close the day’s low at NT $ 583.00. Led by TSMC, the electronics sector fell 2.53% and the semiconductor sub-index lost 3.29%.

Sales were also seen among other major semiconductor stocks.

United Microelectronics Corp., a small contract chipmaker in Taiwan, closed down 1.92% at NT $ 51.20, integrated circuit packaging and testing service provider ASE Technology Holding Co. a Down 3.00% to close at NT $ 113.00, and smartphone IC designer MediaTek Inc. was down 4.87%. to end at NT $ 918.00.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 2.19% to close at NT $ 108.50, and Largan Precision Co., a supplier of camera suppliers. for smartphones at Apple Inc., lost 2.32% to close at NT $ 2,950.00.

“Judging by the losses suffered by these big tech stocks, I expect foreign institutional investors to continue to be net sellers today,” Huang said.

According to the TWSE, foreign institutional investors sold a net NT $ 33.58 billion of shares on Monday after a net sale of NT $ 15.81 billion on Friday.

Counteracting the slowdown, power management IC designer Silergy Corp. rose 0.60% to close at NT $ 3,375.00 on an estimated 20-30% year-over-year sales increase in 2021.

In addition, the flat panel manufacturer AU Optronics Corp. gained 2.57% to close at NT $ 23.10 following a technical rebound from Friday.

“Shipping stocks continued to attract significant buys as many major ports around the world remained stranded, which continued to lead to shortages of freight forwarding services and higher freight rates. “Huang said.

In the transportation sector, which grew 8.37 percent, containerized freight forwarder Wan Hai Lines Ltd. climbed 10 percent, the maximum daily increase allowed, to close at NT $ 249.00,

Evergreen Marine Transport Corp., the world’s largest freight container shipper, rose 8.57% to close at NT $ 153.00, and rival Yang Ming Marine Transport Corp. added 6.02% to close at NT $ 158.50.

The purchases extended to bulk freight companies, with U-Ming Marine Transport Corp. up 10% to close at NT $ 75.60.

Huang said paper suppliers had increased due to the rise in industrial paper prices. Longcheng Paper & Packaging Co. closed up 3.82% at NT $ 27.20, and Shihlin Paper Co. gained the high of 10% to close at NT $ 63.20.

After Monday’s plunge, more losses on the Taiex are possible with strong technical resistance likely seen around the 60-day moving average of 16,837 points, Huang said.

“Investors should watch closely what the Fed says and the reaction of US markets,” Huang said, noting that Fed Chairman Jerome Powell was due to attend a US Congressional hearing later this week.

(By Frances Huang)

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