Taiwan Shares Close Lower as Investors Lock in Gains, Await Fed’s Decision
Shares in Taiwan closed lower on Tuesday as investors decided to lock in gains accumulated in the early morning session, in anticipation of the U.S. Federal Reserve’s upcoming decision, according to dealers. Despite the initial upturn in the market, many investors were cautious and refrained from chasing prices. The Taiex, the weighted index on the Taiwan Stock Exchange, ended the day down by 0.37 percent at 16,636.32 points.
The market initially opened higher and saw a rise of about 65 points as major electronics stocks in the bellwether sector made a comeback. However, as the Taiex approached the technical hurdle of 16,800 points, selling pressure set in and tech heavyweights gave up their gains, pushing the market into negative territory by the session’s end.
The cautious approach of investors can be attributed to the ongoing two-day policymaking meeting of the Federal Reserve. Although the market widely expects that the Fed will keep its key interest rates unchanged, investors are eager to hear what Fed Chair Jerome Powell will say after the meeting for more insight into the central bank’s stance on rate hikes.
Tech stocks, particularly TSMC (Taiwan Semiconductor Manufacturing Co.), were under pressure due to concerns about weakening global demand. TSMC, the most heavily weighted stock in the local market, fell by 0.37 percent, following a significant decline of 3.23 percent the previous day. However, analysts expect TSMC to find technical support as it approaches its intraday low on August 21.
Other semiconductor heavyweights such as MediaTek Inc. and United Microelectronics Corp. also experienced declines, while IC packaging and testing service provider ASE Technology Holding Co. managed to buck the trend and ended the day with a slight gain.
Stocks related to artificial intelligence development added further pressure to the market, with AI server maker Quanta Computer Inc. and rival Wistron Corp. both recording losses. In contrast, the glass and ceramic industry saw rotational buying, with Taiwan Glass Industry Corp. and China Glaze Co. gaining value.
In the financial sector, Fubon Financial Holding Co. and Cathay Financial Holding Co. both registered minor losses. With foreign institutional investors largely selling their positions, local investment trust firms played a crucial role in offsetting the impact of foreign institutional selling.
Overall, the Taiwan stock market faced selling pressure and closed lower as investors sought to secure their gains and awaited the outcome of the Federal Reserve’s meeting. The cautious sentiment surrounding the market reflected concerns about global demand and the potential future direction of interest rates.
Disclaimer: This article is generated by OpenAI’s language model. No promotional language or plagiarism is intended.
