TAIEX closes below 14,600 on Fed fears

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The TAIEX fell more than 100 points yesterday to close below 14,600 as investors profited from losses in U.S. markets overnight amid growing fears of an aggressive rate hike cycle by the Reserve U.S. federal government, the dealers said.

The flagship electronics sector pushed TAIEX lower again, led by large semiconductor stocks, which were hit by concerns that rising interest rates would make them less attractive, it said. the dealers.

The TAIEX closed down 108.28 points, or 0.74%, at 14,561.76. Revenue totaled NT$231.230 billion (US$7.39 billion).

“With the Fed’s policy-making meeting approaching next week, caution over a faster pace of rate hikes undertaken by the Fed continued to dominate market sentiment,” said Tom Tang (湯忠謙) , analyst at MasterLink Securities (元富證券).

Stronger-than-expected retail sales led many investors to expect the Fed to act more aggressively at Tuesday’s and Wednesday’s policymaking meeting, Tang said, referring to an increase an unexpected 0.3% in U.S. retail sales last month from July, compared with an earlier estimate that sales would be little changed.

Tang said the retail sales data just raised fears that Fed rate hikes could intensify after a stronger-than-expected U.S. inflation figure for last month came out on Tuesday.

“It was not at all surprising that tech stocks fell victim to such rate hike fears,” Tang said. “In Taipei, contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) continued to drive the losses.”

TSMC, the most weighted stock in TAIEX, fell 0.94% to close at NT$472 after hitting a low of NT$469.

Led by TSMC, the electronics sector fell 0.97%, with the semiconductor sub-index falling 1.06%.

Among other semiconductor stocks, shares of United Microelectronics Corp (聯電), another contract chipmaker, fell 1.11% to close at a daily low of NT$39.95, while dynamic random access memory chip provider Nanya Technology Corp (南亞科技) fell 2.58% to close at NT$49.10.

As the latest iPhone 14 series went on sale globally yesterday, shares of Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, fell further. 2.07% to close at NT$1,895.

Shares of Hon Hai Precision Industry Co (鴻海精密), an iPhone assembler, looked resilient, falling just 0.46% to close at NT$107.5.

“In addition to rising rate concerns, the electronics sector is also facing weakening global demand for consumer electronics, which has led many investors to hold off on these stocks. “, said Tang.

“Ahead of the Fed meeting, TAIEX is expected to continue consolidating with many investors staying on the sidelines,” Tang said. “I expect the closest technical support to be visible at around 14,500 points.”

Foreign institutional investors sold off a net amount of NT$17.41 billion worth of shares on the main board yesterday, according to data from the Taiwan Stock Exchange.

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