Sep 03, 2019 General Comments Off on Taiwan shares end below 10,600 points as semiconductor stocks weaken
Taipei-Shares in Taiwan moved lower to close below the 10,600-point mark Tuesday as the semiconductor sector came under pressure, sending ripples through the broader market throughout the session, dealers said.
Market sentiment remained cautious as investors spotted futures on the U.S. equity markets falling, pointing to a lower opening later in the day, amid rising trade tension between the United States and China after the world's top two economies escalated tariffs against each other's goods Sunday, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended down 76.64 points, or 0.72 percent, at 10,558.21, after moving between 10,557.03 and 10,650.15, on turnover of NT$104.65 billion (US$3.33 billion).
The market opened down 5.63 points and soon rose slightly into positive territory in the early morning session, moving in a narrow range before selling emerged, in particular in semiconductor heavyweights, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), to push down the Taiex into the red again at around 10:30 a.m., the dealers said.
Selling continued in the bellwether electronics sector and spread to old economy and financial stocks to drag down the broader market to close at almost the day's low at below 10,600 points, they said.
"The trade disputes between Washington and Beijing still dominated the global financial markets, in particular after the latest round of punitive tariffs against each other went into effect Sunday," MasterLink Securities analyst Tom Tang said.
In the latest round of punitive tariffs against each other's goods, the U.S. imposed tariffs on US$112 billion-worth of Chinese goods, raising the duties from 10 percent to 15 percent, and China slapped new tariffs, ranging from 5 percent-10 percent on US$75 billion-worth of U.S. merchandise, effective Sept. 1.
Additional tariffs on a wide range of products, including smartphones and notebook computers made in China, are scheduled to become effective in mid-December.
"Futures on the U.S. market are falling right now, indicating that spot markets will have an ugly opening later in the day, which prompted investors here to cut their holdings in a bid to avoid more losses down the road," Tang said.
"With the Taiex moving closer to the nearest technical resistance level at around the 60-day moving average of 10,650 points, selling set in to send the broader market below 10,600 points by the end of today's session" Tang said.
Tang said large-cap stocks in the semiconductor sector fell victim to concern over a possible downtrend on Wall Street, with TSMC, the most heavily weighted stock in the market, in focus.
TSMC, the world's largest contract chipmaker, lost 1.36 percent to close at NT$254.00, with 25.74 million shares changing hands. TSMC's losses contributed a roughly 35-point fall to the Taiex, and pushed down the electronics sector and the semiconductor sub-index 0.92 percent and 1.37 percent, respectively.
Also in the semiconductor sector, integrated circuit designer MediaTek Inc. fell 1.75 percent to close at NT$364.00 and IC packaging and testing services provider ASE Technology Holding Co. shed 2.80 percent to end at NT$69.50.
Bucking the downturn, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.67 percent to close at NT$3,950 as investors put their funds into the stock as a safe haven in hopes that Apple will launch its next-generation iPhones Sept. 10 to boost the Taiwanese supplier's shipments, the dealers said.
"The global trade issue also led investors to dump old and financial stocks, placing more downward pressure on the Taiex in the session," Tang said.
Among the falling old economy stocks, Hotai Motor Corp., the local sales agent for Japan's Toyota Motor Corp., shed 4.13 percent to close at NT$417.50 on a fall in car sales in August, food brand Uni-President Enterprises Corp. lost 1.17 percent to end at NT$75.80, and Formosa Chemicals and Fibre Corp. fell 0.80 percent to close at NT$86.80.
In the financial sector, which ended down 0.37 percent, Cathay Financial Holding Co. lost 0.38 percent to close at NT$39.80 and Fubon Financial Holding Co. fell 0.57 percent to end at NT$43.25.
"Investors here have to watch how Wall Street will move at a time of no immediate solution to the trade dispute," Tang said. "If volatility in the U.S. markets continues, the local main board could move lower before reaching the strong technical support level at around 10,300 points."
According to the TWSE, foreign institutional investors sold a net NT$7.19 billion-worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel