Taiwan shares end down on Wall Street losses

2018/03/14 17:35:08 fontsize-small fontsize-default fontsize-big
Taiwan shares end down on Wall Street losses

Taipei, March 14 (CNA) Shares in Taiwan closed lower but still stood above the 11,000-point mark Wednesday as selling was sparked by a pullback on Wall Street overnight amid rising worries over trade protectionism in the United States, dealers said.

The bellwether electronics sector led the downturn on the broader market, with many large-cap stocks in focus after a plunge suffered by high-tech stocks in the U.S. market, while selling also spread to the old economy and financial sectors throughout the trading session, the dealers said.

The weighted index on the Taiwan Stock Exchange ended down 56.83 points, or 0.51 percent, at 11,038.80, after moving between 11,015.47 and 11,070.29, on turnover of NT$118.42 billion (US$4.06 billion).

The market opened down 0.29 in the wake of a falling Wall Street, where the Dow Jones Industrial Average closed down 171 points or 0.68 percent a day earlier after U.S. President Donald Trump fired State Secretary Rex Tillerson and appointed Mike Pompeo, director of the CIA, as his successor. Pompeo is perceived as a hardliner on trade issues, which could impact global trade.

Selling on the local main board continued, with the high-tech sector facing heavy pressure as investors here took cues from a 1.02 percent drop on the tech-heavy NASDAQ index after Trump rejected a merger between Singapore-headquartered Broadcom and U.S.-based Qualcomm, citing national security, the dealers said.

"It seems that the trade protectionism specter came back to haunt the global equity markets after Pompeo was appointed," KGI Securities analyst Phil Chu said. "There are rising fears that Pompeo will be harsh toward China, which is expected to boost tension in global trade."

Taiwan was not the only regional market to follow Wall Street to move lower, as other markets, such as Tokyo, Hong Kong and Shanghai, also moved lower amid protectionism concerns.

On the local main board, the bellwether electronics sector closed down 0.72 percent, with the semiconductor sub-index down 0.71 percent, as investors fear that the rejection of the Broadcom and Qualcomm merger is a harbinger for protectionism in the U.S. technology sector, Chu said.

"Investors here simply seized on this concern to lock in the gains they had built up for tech stocks in recent sessions," Chu said.

Among the falling electronics heavyweights, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, fell 0.77 percent to close at NT$257.00, off an early low of NT$255.50.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, shed 2.00 percent to end at NT$93.30, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., lost 2.10 percent to end at NT$3,960.00.

In the financial sector, which closed down 0.23 percent, Mega Financial Holding Co. fell 1.35 percent to end at NT$25.30, and CTBC Financial Holding Co. lost 0.46 percent to end at NT$21.85, while Cathay Financial Holding Co. closed unchanged at NT$53.90.

Among the losing old economy stocks, food brand Uni-President Enterprises Corp. dropped 0.72 percent to close at NT$69.30, and textile firm Far Eastern New Century Corp. lost 1.15 percent to end at NT$25.75.

"Despite the fall in points, turnover remained moderate, indicating that not many investors dumped stocks today. I guess they still have high hopes that the Taiex will move higher after the correction," Chu said.

"However, we have to keep alert over how Wall Street will perform, which is expected to continue to dictate global markets," Chu said.

According to the TWSE, foreign institutional investors sold a net NT$8.32 billion-worth of shares on the main board Wednesday.

(By Frances Huang)

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