Taiwan shares end below 11,000 points, led by TSMC

2018/08/07 16:34:57 fontsize-small fontsize-default fontsize-big
CNA file photo

CNA file photo

Taipei, Aug. 7 (CNA) Shares in Taiwan moved lower and ended below the 11,000-point mark Tuesday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) continued to fall in the wake of a computer virus attack last week, dealers said.

The selling suffered by TSMC, the most heavily weighted stock in the local market, was offset to some extent by select electronics component stocks and non-tech stocks, while market sentiment remained bothered by lingering trade friction between the United States and China, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended down 40.66 points, or 0.37 percent, at the day's low of 10,983.44, off a high of 11,030.09, on turnover of NT$118.83 billion (US$3.88 billion).

The market opened up 0.87 points and soon rose to the day's high on follow-through buying from a session earlier, but selling set in with TSMC in focus after the chipmaker's American depositary receipts (ADRs) fell 1.49 percent on the U.S. market overnight, the dealers said .

TSMC's movement continued to dominate the broader market for the rest of the session as sentiment was hurt by the virus incident, which is expected to cut the chipmaker's revenue for the third quarter and its gross margin, the dealers added.

TSMC said Monday that its sales for the July-September period could be cut by less than 2 percent by the virus infection, which interrupted its production and delayed shipments. However, the latest expected sales decline was smaller than the 3 percent the company gave Sunday.

"Still, the virus incident raised concerns over information security in the local manufacturing sector, so investors simply unloaded TSMC shares and other tech stocks today," Mega International Investment Services Corp. analyst Alex Huang said.

TSMC fell 1.63 percent to close at NT$241.50, with 23.96 million shares changing hands.

"In addition, after TSMC held an investor conference July 19, the stock gained significantly as its sales guidance for the third quarter did not disappoint the market. I think investors just used the virus incident as an excuse to take profits," Huang said.

Selling spread to other tech heavyweights, with Hon Hai Precision Industry Co. down 0.24 percent to end at NT$84.40, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., down 2.24 percent to close at NT$5,015.00.

Despite the fall in TSMC shares, Huang said, the bellwether electronics sector got some support from expensive passive component stocks. Passive components refer to products such as chip resistors and multi-layer ceramic capacitor (MLCC) chips.

Among them, Yageo Corp. rose 8.84 percent to close at NT$788.00 and rival Walsin Technology Corp. gained 10 percent, the maximum daily increase, to end at NT$320.50.

Huang said certain non-high-tech stocks took the spotlight when the tech giants fell.

In the old economy sector, Tung Ho Steel Corp. gained 1.11 percent to close at NT$22.80, and Eclat Textile Co. added 0.88 percent to end at NT$345.00.

"Global trade tensions remain a concern for many investors," Huang said. "There is no sign that the disputes will be resolved anytime soon."

Late last week, China announced that it will impose tariffs ranging between 5 percent-20 percent on US$60 billion-worth of U.S. goods if the U.S. proceeds with more duties on Chinese imports.

The announcement came after U.S. President Donald Trump said he has asked the U.S. Trade Representative to consider increasing proposed tariffs on US$200 billion-worth of Chinese goods to 25 percent, from an initially announced 10 percent.

(By Frances Huang)
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