Taiwan shares fall below 10,600 points

2017/12/05 17:28:15 fontsize-small fontsize-default fontsize-big
Taiwan shares fall below 10,600 points

Taipei, Dec. 5 (CNA) Shares in Taiwan closed below 10,600 points Tuesday as the bellwether electronics sector took a beating, led by Taiwan Semiconductor Manufacturing Co., after tech stocks on Wall Street fell overnight, dealers said.

Some bargain hunting in non-tech stocks emerged late in the trading session, however, helping the broader market to recover some of its early losses, they said.

Market sentiment turned cautious as investors remained wary of possible further foreign institutional selling after a massive net sell last week that dragged down the main board by 2.34 percent, dealers said.

On Tuesday, the weighted index on the Taiwan Stock Exchange ended down 84.26 points, or 0.79 percent, at 10,566.85, after moving between 10,540,74 and 10,635.71. Turnover totaled NT$144.32 billion (US$4.81 billion) during the session.

The market opened down 0.41 percent, below the 60-day moving average of 10,644 points, as TSMC, the most heavily weighted stock on the local market, came under pressure.

The selling spread to other tech heavyweights such as iPhone assembler Hon Hai Precision Industry Co. and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., before bargain hunters entered the trading, helping to prop up the index at the end of the session, dealers said.

The selling in tech stocks reflected a 2.45 percent plunge on the Philadelphia Semiconductor Index and a 1.05 percent dive on the tech-heavy NASDAQ index in the United States overnight, dealers said.

"It was another bad day for the local main board as TSMC, Hon Hai and Largan, the three major stocks in Taiwan, suffered heavy losses," Mega International Investment Services Corp. analyst Alex Huang said.

TSMC, the world's largest contract chipmaker, fell 1.92 percent to close at NT$229.50 with 29.63 million shares changing hands, while Hon Hai, second to TSMC in terms of market capitalization, shed 3.43 percent to end at NT$95.60.

Largan dropped 1.46 percent to close at NT$4,730.00, but remained the most expensive stock in Taiwan. On Monday, the stock fell below the NT$5,000 mark for the first time since July 7.

Led by TSMC, the bellwether electronics sector closed down 1.46 percent, and the semiconductor sub-index ended 1.62 percent lower.

"I think the selling came largely from foreign institutional investors, who are likely to keep pocketing their gains in these large-cap stocks until they go on Christmas vacation," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$517 million worth of shares on the main board Tuesday.

"The recent heavy selling by foreign institutional investors has made many of their local counterparts nervous," Huang said.

Local investors do want to keep their holdings right now amid worry about more foreign institutional selling, he said, referring to a net sell of NT$44.9 billion by foreign institutional investors last week.

However, select non-high tech stocks outperformed the broader market on the back of bargain hunting late in the trading session, Huang said.

Among them, Formosa Petrochemical Corp. gained 1.37 percent to close at NT$111.00, off an early low of NT$108.50, and Nan Ya Plastics Corp. added 0.26 percent to end at NT$75.80.

In the financial sector, Fubon Financial Holding Co. rose 0.39 percent to close at NT$51.50 after hitting a low of NT$50.60, and CTBC Financial Holding Co. gained 0.49 percent to end at NT$20.65, off an early high of NT$20.45.

"After the choppy trading in recent sessions, I expect the main board to find short term technical support at the 120-day moving average of 10,525 points," Huang said.

(By Frances Huang)
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