Taiwan shares close down on profit taking

2017/09/11 17:18:07 fontsize-small fontsize-default fontsize-big
CNA file photo

CNA file photo

Taipei, Sept. 11 (CNA) Shares in Taiwan closed lower Monday as investors pocketed earlier gains amid caution over whether foreign institutional investors would continue to unload their holdings in local equities, dealers said.

After net selling of about NT$5 billion (US$267 million) by foreign institutional investors last week, many local investors turned cautious about future foreign investor moves and so chose to lock in profits for the moment, they said.

The weighted index on the Taiwan Stock Exchange closed down 37.79 points, or 0.36 percent, at 10,572.16, after moving between 10,565.78 and 10,656.25, on turnover of NT$130.08 billion.

The market opened up 0.19 percent and rose to the day's high on follow-through buying from the earlier session, with buying focused on major suppliers to Apple Inc. ahead of the launch of the next generation iPhone expected later in the week, dealers said.

With the weighted index briefly breaching the 10,650-point mark, selling set in as investors rushed to take profits, pushing large cap high tech stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), into negative territory and dragging down the broader market to below the previous closing level, they said.

"With foreign institutional investors standing on the sell side last week, many local investors felt wary and opted to take money and step away from the trading floor for the moment," MasterLink Securities analyst Tom Tang said.

According to TSMC, foreign institutional investors sold a net NT$5.04 billion worth of shares on the main board last week, with shares in Hannstar Display Corp. (彩晶), a small-sized flat panel maker in Taiwan, at the top of the sell list.

"After recent strong buying to help the weighted index stay above the 10,000-point level for the 79th consecutive session on Friday, foreign institutional investors seemed to hold back from from buying," Tang said. "To many foreign institutional investors, the current valuations appeared high."

Tang said select "Apple concept stocks" such as TSMC, received an initial boost in the session from hopes Apple will launch the next generation iPhone later in the week, but that waned later. "The positive leads from Apple have largely been factored into the share price of these stocks. I am afraid that after the new iPhone debuts, selling in these stocks will increase," Tang said.

Among the Apple concept stocks, TSMC, the most heavily weighted stock on the local market, fell 0.46 percent to NT$217.00 after hitting an intraday high of NT$219.50. TSMC is believed to supply the A11 process for the new iPhone.

Hon Hai Precision Industry Co. (鴻海), an assembler of iPhones and iPads, lost 0.85 percent to end at NT$116.00, off an early high of NT$118.00 and shares in Largan Precision Co. (大立光), a smartphone camera lens supplier to Apple, shed 2.43 percent to close at NT$5,825.00, off an early high of NT$5,985.00.

"Selling in some second tier optoelectronics stocks showed local investors' caution toward future market movement as they have favored these stocks most in recent sessions," Tang said.

Among second tier optoelectronics stocks, Genius Electronic Optical Co.(玉晶光) fell by the daily maximum 10 percent to close at NT$505.00, even though the company reported last week that its consolidated sales for August rose almost 50 percent from a month earlier.

"Fortunately, the Taiwan dollar still moves around the NT$30 mark against the U.S. dollar and its strength led many foreign investors to stay in the local market, which is expected to prevent heavy losses in share prices for now," Tang said.

(By Tien Yu-pin and Frances Huang)

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