Taipei: Shares in Taiwan closed lower on Friday amid re-emerging concerns over tensions in the Middle East following the exchange of fire between the United States and Iran in the Strait of Hormuz. The Taiex, the Taiwan Stock Exchange's benchmark index, ended down 329.84 points, or 0.79 percent, at 41,603.94 after moving between 41,132.25 and 42,038.60. Turnover totaled NT$1.25 trillion (US$39.32 billion).
According to Focus Taiwan, the market opened down and made an attempt to stage a rebound in the early morning session. However, selling pressure increased, capping the index below the previous closing level, primarily driven by large-cap tech stocks. This followed a 0.63 percent fall on the Nasdaq index and a 2.72 percent drop on the Philadelphia Semiconductor Index overnight.
Hua Nan Securities analyst Kevin Su noted that renewed fears over the Middle East prompted investors both abroad and domestically to trim holdings in liquid tech stocks. The sell-off was indicative of investors rushing to secure their recent gains amidst optimism toward AI development.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which represents over 40 percent of total market value, fell 0.87 percent to close at NT$2,290.00. The drop in TSMC's stock accounted for about 200 points of the Taiex's decline. Other tech firms also saw declines, with ASE Technology Holding Co. shedding 4.44 percent to end at NT$516.00, and Nanya Technology Corp. falling 4.53 percent to close at NT$274.00. Contrarily, MediaTek Inc., a smartphone IC designer, gained 6.14 percent to end at NT$3,630.00.
In further developments within the tech sector, Hon Hai Precision Industry Co. dropped 1.38 percent to close at NT$250.00, and Delta Electronics Inc. ended down 3.51 percent at NT$2,200.00.
Kevin Su mentioned that in the face of a declining market, investors shifted their funds to defensive telecom stocks as a safe haven. This move saw Chunghwa Telecom Co. rise 0.74 percent to close at NT$136.50, and Far EasTone Telecommunications Co. gain 0.52 percent to end at NT$95.90.
Old economy stocks largely weakened alongside the broader market. Formosa Plastics Corp. lost 2.02 percent to close at NT$48.55, while Nan Ya Plastics Corp. dropped 1.88 percent to end at NT$88.60. In the steel sector, China Steel Corp. fell 0.53 percent to close at NT$18.75, and Tung Ho Steel Corp. ended down 0.30 percent at NT$67.40.
The financial sector, however, saw a rise of 0.87 percent after consolidation, with Fubon Financial Holding Co. rising 2.33 percent to close at NT$96.70, and Cathay Financial Holding Co. gaining 1.27 percent to end at NT$80.00.
The U.S. nonfarm payroll report for April is expected to be released later on Friday. Kevin Su commented that a robust job market could potentially lead the Federal Reserve to adopt a hawkish stance on monetary policy, impacting financial markets.
According to TWSE, foreign institutional investors sold a net NT$12.08 billion of shares on the main board on Friday.