Taiwan shares fall to 8-month low

2018/10/08 17:54:35 fontsize-small fontsize-default fontsize-big
Taiwan shares fall to 8-month low

Taipei, Oct. 8 (CNA) Shares in Taiwan fell for the fifth consecutive session Monday to close at their lowest level in eight months amid lingering fears over further fund outflows, dealers said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on Taiwan's market, came under heavy pressure and dragged both the bellwether electronics sector and the broader market lower, they said.

Old economy and financial stocks appeared resilient, however, lending some support to the Taiwan stock exchange's weighted index, the Taiex, dealers said.

The Taiex ended down 61.19 points, or 0.58 percent, at 10,455.93, after moving between 10,403.13 and 10,507.83, on turnover of NT$124.84 billion (US$4.04 billion).

The last time the Taiex closed that low was on Feb. 12, when it ended at 10,421.09.

The market opened down 0.47 percent and soon dipped further to the day's low because of a plunge in the semiconductor sector.

Investors were reacting to heavy losses suffered by tech stocks in U.S. markets on Friday and a spike in the U.S. benchmark 10-year treasury bond yield, dealers said.

But as the Taiex moved closer to its nearest technical support at around 10,400 points, bargain hunters emerged to pick up old economy and financial stocks, helping the broader market recover from the day's low, they said.

"It seemed that some investors were willing to bargain hunt non-tech stocks for the moment to prevent the Taiex from falling further and offset TSMC's plunge," Xincheng International Investment Consultant analyst Chang Chih-cheng said.

"Judging from the gains posted by large-cap old economy and financial stocks, I'm guessing the buying came mainly from government-led funds, which wanted to prop up the index at a time when regional financial markets remain jittery over fund outflows," Chang said.

Chang said the concerns were triggered by the sharp rise in the yield of the benchmark U.S. 10-year bond on expectations that the Fed will accelerate its rate hike cycle.

That has pushed the value of the U.S. dollar higher and led investors to pursue U.S. dollar-denominated assets.

In the financial sector, which ended up 0.44 percent Monday, Fubon Financial Holding Co. gained 1.38 percent to close at NT$51.60, and Cathay Financial Holding Co. rose 1.37 percent to end at NT$51.90.

Among the gaining old economy stocks, textile firm Far Eastern New Century Corp. rose 1.59 percent to close at NT$35.05, Formosa Chemicals & Fibre Corp. added 0.83 percent to end at NT$121.50, and China Steel Corp., the largest steel maker in Taiwan, gained 0.60 percent to close at NT$25.25.

"Liquid tech stocks were largely the victims today as foreign institutional investors continued to adjust their Taiwan portfolios," Chang said. "TSMC was the first for them to cash in due to growing caution over the global semiconductor industry."

TSMC fell 2.60 percent to close at NT$243.50, with 50.87 million shares changing hands. Led by TSMC, the bellwether electronics sector closed down 1.28 percent and the semiconductor sub-index ended down 2.24 percent.

In the semiconductor sector, integrated circuit packaging and testing services provider ASE Technology Holding Co. shed 1.41 percent to close at NT$69.70, and IC designer MediaTek Inc. lost 0.43 percent to end at NT$233.50.

Bucking the downturn, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 2.03 percent to close at NT$3,510.00 and Catcher Technology Co., a metal casing maker for Apple, also gained 2.03 percent to end at NT$321.00.

"I think the gains they posted were just technical in nature," Chang said. "The local stock market remains worried about a possible fund exodus, and more losses are possible."

According to the TWSE, foreign institutional investors sold a net NT$11.13 billion in shares on the market Monday.

(By Frances Huang)

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