Taiwan shares fall 1.43% on Fed rate hike

2018/06/14 17:31:04 fontsize-small fontsize-default fontsize-big
Taiwan shares fall 1.43% on Fed rate hike

Taipei, June 14 (CNA) Shares on the Taiwan Stock Exchange fell 1.43 percent, or 159.23 points, to close at Thursday's low of 11,013.98 on news that the U.S. Federal Reserve had raised its benchmark lending rate the previous day -- the second increase of the year.

The weighted index, the key barometer of the main board, opened at the session's high of 11,143.04 before losing momentum to close at the day's low of 11,013.98 on turnover of NT$164.15 billion (US$5.48 billion), led by falls in the three major Apple-concept stocks, as well as gaming and passive component stocks.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract chipmaker and the market's most heavily weighted stock, lost 2.37 percent to close at NT$226.5.

Largan Precision Co., a smartphone camera lens supplier to Apple Inc., slid 2.33 percent to end at NT$4,620, while Hon Hai Precision Industry Co., the world's largest contract electronics maker and assembler of iPhones and iPads, lost NT$2.62 to finish at NT$85.5.

A total of 239 stocks gained ground, while 567 lost ground, with 108 remaining unchanged.

As the Fed signaled that it might increase the lending rate two more times this year amid strong economic growth, funds are expected to flow into the U.S. stock market, which will affect the local bourse in the short term, market analyst Kevin Lin (林成蔭) said.

In addition, the European Central Bank was set to hold a meeting later Thursday to discuss whether it should announce an end to its quantitative easing in September, which Lin said could drag drown the markets of some countries with poor finances and affect local market sentiment.

However, he forecast that the prospects for the local stock market will remain promising in the mid- and long-term and will gradually rise and challenge the previous high of 11,270.

With the approaching high season for semiconductor shares, Lin suggested that investors buy electronics shares in the second half of the year, coupled with financial and raw materials shares.

(By Chang Liang-chih and Flor Wang)
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