Taiwan shares end flat after moving in consolidation

2018/06/11 17:56:48 fontsize-small fontsize-default fontsize-big
Taiwan shares end flat after moving in consolidation

Taipei, June 11 (CNA) Shares in Taiwan closed little changed on Monday after moving in consolidation mode as investors turned cautious about a possible retreat, with the market moving closer to the intraday high of 11,270 points for this year seen in January, dealers said.

Caution also resulted from a two-day policymaking meeting scheduled by the U.S. Federal Reserve to start Tuesday, with the bellwether electronics sector trading in a sluggish manner throughout the session, they said.

The weighted index on the Taiwan Stock Exchange or the Taiex closed down 7.19 point, or 0.06 percent, at 11,149.23, after moving between 11,118.81 and 11,186.67, on turnover of NT$153.13 billion (US$5.14 billion).

The market opened up 0.11 percent and rose slightly to the day's high on a mild technical rebound from a 0.85 percent plunge on Friday, but selling soon set in, pushing the Taiex below the previous closing level, dealers said.

With the electronics sector in the doldrums and large cap stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) in negative territory, the broader market continued to move in a narrow range for the rest of the trading session, they said.

"After Friday's pullback, investors seemed more cautious about further selling ahead of the intraday high of 11,270 points (on Jan. 23)," Xincheng International Investment Consultant analyst Chang Chih-cheng said.

"It was not surprising that the local main board fell into consolidation mode today with the bellwether electronics sector staying sluggish," Chang said. "Without a flying tech sector, it is unlikely the broader market will jump over the technical hurdles before that level."

"I think the Taiex needs more time to digest downward pressure before breaking the current stalemate," he said.

In the electronics sector, which closed up 0.07 percent, TSMC, the most heavily weighted stock on the local market fell 0.44 percent to end at NT$226.00 with 21.67 million shares changing hands. TSMC's fall came after a 0.85 percent drop on the Philadelphia Semiconductor Index in the U.S. Friday.

Among other tech stocks on the local main board, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, shed 1.02 percent to end at NT$87.40, while shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., gained 0.11 percent to close at NT$4,550.00.

Bucking the downturn on the broader market, memory chip maker Winbond Electronics Corp. rose 0.73 percent to end at NT$20.65 after the company announced it would break ground on a plant representing an investment of NT$335 billion in September.

"Investors were also reluctant to trade today before a Fed policymaking meeting," Cheng said. "While the market widely anticipates the Fed will raise its key interest rates this time, many investors are waiting for more clues about how the U.S. central bank will implement its rate hike cycle for the rest of this year."

The financial sector, which was generally under pressure before the Fed's conclusion, closed down 0.04 percent, with Fubon Financial Holding Co. down 0.19 percent to end at NT$53.70, and Mega Financial Holding Co. down 0.55 percent to end at NT$26.95.

Selling also spread to the old economy sector with shares in food brand Uni-President Enterprises Corp. down 1.33 percent to close at NT$74.00, and Far Eastern New Century Corp. down 2.19 percent to end at NT$29.00.

According to the TWSE, despite the fall of the Taiex, foreign institutional investors bought a net NT$5.49 million worth of shares on the main board Monday.

(By Frances Huang)

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