Taiwan shares pare losses after Taiex plummets almost 200 points

2019/05/14 12:09:45 fontsize-small fontsize-default fontsize-big
Taiwan shares pare losses after Taiex plummets almost 200 points

Taipei, May 14 (CNA) Shares in Taiwan were battling to recoup their early losses Tuesday morning after the Taiex plunged nearly 2 percent in the first few minutes of trading in reaction to heavy losses in U.S. markets overnight, dealers said.

Bargain hunters rushed to pick up large cap stocks in the bellwether electronics sector as well as financial stocks to push the broader market back to the 10,500 point level, they said.

"Judging from the movement of tech and financial stocks, I suspect the buying largely came from government-led funds in a bid to bolster market confidence here," MasterLink Securities analyst Tom Tang said.

As of 11:26 a.m., the weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, had fallen 39.48 points, or 0.37 percent, to 10,518.81 after hitting a low of 10,363.02, on turnover of NT$88.60 billion (US$2.78 billion).

The market opened down 78.08 points and hit its low within minutes after the Dow Jones Industrial Average fell 2.38 percent and the tech-heavy Nasdaq closed down 3.41 percent as the trade spat between the United States and China escalated.

With the Taiex moving closer to the nearest technical support level of around 10,200 to 10,300 points, bargain hunting emerged to lead the broader market to cut most of its losses, they said.

"Look at other regional markets. They also recovered from their earlier losses, giving bargain hunters here a good reason to jump in," Tang said, referring to markets in Tokyo and Shanghai.

Among the tech stocks bargain hunters favored, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, was unchanged at NT$250.50 after hitting a low of NT$245.00 as of 11:26 a.m.

"As long as TSMC remained resilient, it was unlikely that the overall market would suffer a steep downtrend," Tang said. "That's why government-led funds were buying the stock."

Also in the electronics sector, integrated circuit design MediaTek Inc. had lost 0.35 percent to NT$285.50, off an early low of NT$276.50, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., was up 0.47 percent at NT$4,270.00, off a low of NT$4,120.00 as of 11:26 a.m.

iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization, had lost 1.72 percent to NT$79.80, off a low of NT$78.80, but was still underperforming the broader market.

"Terry Gou (郭台銘) has said he will step back from Hon Hai's day to day operations and will not seek the chairmanship, which has raised concerns among many investors," Tang said.

Gou announced in mid-April that he would try his hand at politics and make a presidential run by participating in the opposition Kuomintang's presidential primary.

Tang said the government-led funds also picked up select financial stocks to give additional support to the market.

Mega Financial Holding Co. had gained 0.34 percent to NT$29.60, off a low of NT$29.35, while CTBC Financial Holding Co. had fallen 0.48 percent to NT$20.95, off a low of NT$20.80 as of 11:26 a.m.

"While the Taiex came off its earlier low, it remains technically weak after falling below the 60-day moving average (of around 10,607) yesterday," Tang said.

"Before Washington and Beijing find a way to resolve their trade disputes, anxiety is expected to affect global financial markets, including Taiwan," he said.

(By Jiang Ming-yan, Chung Jung-feng and Frances Huang)
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