Taiwan shares end flat as TSMC recoups most of losses

2018/06/12 17:42:53 fontsize-small fontsize-default fontsize-big
Taiwan shares end flat as TSMC recoups most of losses

Taipei, June 12 (CNA) Shares in Taiwan closed little changed Tuesday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) staged a rebound in late trading to help the broader market recover most of its earlier losses by the end of the session, dealers said.

Market sentiment was tempered by cautious investors watching the outcome of a historic summit between the United States and North Korea, while the sluggish performance of the local equity market also came ahead of a policymaking meeting scheduled by the U.S. Federal Reserve set for later in the day, they said.

The weighted index on the Taiwan Stock Exchange or the Taiex closed down 4.44 points, or 0.04 percent, at 11,144.79, after moving between 11,088.53 and 11,160.05, on turnover of NT$179.61 billion (US$6.02 billion).

The market opened down 9.21 points on follow-through selling from the previous session as investors took their cue from a lackluster performance on Wall Street, where the Dow Jones Industrial Average closed up 0.02 percent overnight amid geopolitical concerns before the U.S.-North Korea summit began, dealers said.

Selling pushed the Taiex to below the 11,100 point mark before bargain hunting emerged to pick up TSMC, the most heavily weighted stock on the local market, in particular in the late trading session, which helped the main board recoup most of its earlier losses and end little changed, they added.

After the summit, which has been watched closely by global financial markets, U.S. President Donald Trump and North Korean leader Kim Jong Un signed an agreement, in which Kim reaffirmed his commitment to the complete denuclearization of the Korean Peninsula.

"The agreement is just a framework. There are still plenty of details to be mapped out to reach such a goal," Mega International Investment Services Corp. analyst Alex Huang said.

"We need to continue to watch how both sides will work so uncertainty remains," Huang said.

Such a geopolitical issue capped buying interest not only in Taipei but also in regional markets, Huang said. "I am not surprised that the Taiex moved in a narrow range today."

Fortunately, Huang said, TSMC recovered from its earlier low and due to its heavyweight status, the stock lifted the broader market by the end of the session.

TSMC gained 0.34 percent to close at the day's high of NT$229.00 after hitting a low of NT$224.00, with 29.49 million shares changing hands. The gains posted by TSMC contributed about 30 points to the Taiex.

"I think buying in TSMC could have come from foreign institutional investors and even government-led funds which tried to manage the Taiex movement and kept the index from falling further," Huang said.

Also in the bellwether electronics sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, rose 0.34 percent to close at NT$87.70, while shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., fell 2.42 percent to end at NT$4,440.00.

Non-high tech stocks ended mixed on Tuesday, with Mega Financial Holding Co. falling 0.74 percent to close at NT$26.75 and Cathay Financial Holding Co. losing 0.54 percent to end at NT$55.10, while Nan Ya Plastics Corp. rose 0.35 percent to close at NT$85.30.

"Many investors remain reluctant to buy for the moment, in particular before the Fed policymaking meetings starts," Huang said.

While the market widely anticipates the Fed will raise key interest rates at the meeting, investors are waiting to hear comments from the U.S. central bank for more clues about how it will adjust monetary policy down the road, Huang said.

(By Frances Huang)

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