Taipei: Shares in Taiwan closed lower Monday as investors remained concerned about U.S. President Donald Trump's tariff policies after he intensified trade tensions by announcing a 30 percent levy on imports from Europe and Mexico over the weekend, dealers said. The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended down 136.06 points, or 0.60 percent, at 22,614.97 after moving between 22,525.66 and 22,735.23. Turnover totaled NT$271.28 billion (US$9.28 billion).
According to Focus Taiwan, the tariffs will go into effect on Aug. 1, but before that, negotiations could be held to reach a better deal. "Trump just moved the July 9 deadline to Aug. 1, and uncertainties remain," Mega International Investment Services analyst Alex Huang said. "Investors have been cautious about how Taiwan will strike a deal. But, to me, no news is good news as talks between Taiwan and the U.S. still continue."
Huang noted that the bellwether electronics sector led the downturn in the broader market as investors locked in profits built by the sector last week, aiding the Taiex rebound. Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock, fell 0.45 percent to close at NT$1,095.00 after coming off a low of NT$1,085.00, representing a 40-point fall in the Taiex.
Among other semiconductor stocks, smartphone IC designer MediaTek Inc. lost 2.46 percent to end at NT$1,385.00, and TSMC's application-specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. dropped 2.80 percent to close at NT$1,215.00. Additionally, Alchip Technologies Inc., another ASIC designer, fell 3.50 percent to end at NT$3,310.00.
In the tech sector, which lost 0.86 percent, iPhone assembler and artificial intelligence server maker Hon Hai Precision Industry Co. dropped 0.62 percent to close at NT$160.50, while Quanta Computer Inc., another AI server supplier, ended down 1.28 percent at NT$269.50.
"With buying rotating out of the tech sector, investors parked their money in the petrochemical industry due to relatively low valuations after a recent sell-off," Huang said. "But, I have to say fundamentals in the industry remain fragile." The petrochemical index rose 3.34 percent to cap the downturn on the Taiex, with Formosa Plastics Corp. rising 5.00 percent to close at NT$35.70, and Nan Ya Plastics Corp. ending up 2.63 percent at NT$27.35.
Elsewhere, Formosa Chemicals and Fibre Corp. gained 3.61 percent to close at NT$22.95, and Formosa Petrochemical Corp. rose 1.39 percent to end at NT$36.40. Eclat Textile Co. shed 4.04 percent to close at NT$380.00, and Makalot Industrial Co. ended down 2.00 percent to NT$245.00.
In the old economy sector, Shihlin Electric and Engineering Corp. lost 0.80 percent to close at NT$187.00, but Fortune Electric Co. gained 5.53 percent to end at NT$611.00. In the mixed financial sector, which lost 0.07 percent, Fubon Financial Holding Co. closed unchanged at NT$82.60, while Cathay Financial Holding Co. rose 1.12 percent to end at NT$63.20.
"Judging from last-ditch buying in TSMC, the Taiex is expected to see strong technical support at around 22,000, closer to the 20-day moving average of 21,773," Huang said. "In addition to the technical factor, the Taiex could be moved by U.S. inflation data, which will be due Tuesday, an indicator of the Federal Reserve's policy."
Foreign institutional investors sold a net NT$2.95 billion in shares on the market Monday.