Sep 24, 2019 Market Comments Off on Taiwan shares end flat amid global economic concerns, trade worries
Taipei-Shares in Taiwan closed little changed in another slow session Tuesday as concerns over the global economy were running deeper after the eurozone reported disappointing manufacturing activity data overnight, dealers said.
Turnover on the local main board remained thin at a time when many investors stayed on the sidelines amid lingering fears over further uncertainty arising from the ongoing trade dispute between the United States and China, although the two sides agreed to hold high-level trade talks next month, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended down 1.01 points, or 0.01 percent, at 10,918.01, after moving between 10,886.62 and 10,947.53, on turnover of NT$108.73 billion (US$3.5 billion).
The market opened down 1.58 points on follow-through selling from a session earlier, when the Taiex closed down 0.10 percent, and continued to move in a narrow range as local investors took hints from the mixed U.S. markets, the dealers said.
In the United States, the Dow Jones Industrial Average closed up 0.06 percent and the tech-heavy Nasdaq index ended down 0.06 percent after the weaker manufacturing activity in the eurozone, according to the dealers.
With trading volume thin, large-cap stocks across the board kept moving in a limited range throughout the session, which prevented the broader market from making a breakthrough, while select heavyweights, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), recouped earlier losses, helping the main board to close above the 10,900-point mark, the dealers said.
"It was another quiet trading session, as many investors remained cautious about the global economy after the latest eurozone economic data," Concord Securities analyst Alex Huang said.
On Monday, IHS Markit reported that the Purchasing Managers' Index (PMI) in the eurozone for August fell to a low of more than six years and that the activity in the service sector also dipped to a low of eight months.
"The PMI in the eurozone struck the nerves of many investors at home and abroad, and as there are no signs that Washington and Beijing will reach a deal any time soon to resolve their trade dispute, the market is concerned about the deterioration of the global economy," Huang said.
"Global trade concerns are expected to bother the financial markets, although both sides agreed to hold talks in October," he said.
On Monday, U.S. Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer will meet with Chinese Vice Premier Liu He (??) for trade talks in two weeks.
"The silver lining is that TSMC, the most heavily weighted stock in the local market, recovered from its earlier losses to close higher, helping the Taiex to end above 10,900 points today," Huang said. "The local market remained awash in liquidity as foreign institutional investors stayed on the buy side."
According to the TWSE, foreign institutional investors bought a net NT$2.17 billion-worth of shares on the main board Tuesday, marking the 13th consecutive session in which foreign institutional investors registered a net buy.
TSMC, the world's largest contract chipmaker, rose 0.38 percent to close at NT$265.00 off an early low of NT$262.00, with 24.21 million shares changing hands.
Also in the bellwether electronics sector, iPhone assembler Hon Hai Precision Industry Co. came off an early low of NT$74.50 to end up 0.27 percent at NT$74.90, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., fell 1.40 percent to close at NT$4,240.00, and integrated circuit designer MediaTek Inc. lost 0.26 percent to end at NT$387.00.
In addition to the electronics sector, Huang said trading interest in the old economy and financial sectors also remained low amid the global trade concerns.
Among the old economy stocks, Formosa Chemicals & Fibre Corp. lost 0.89 percent to close at NT$88.80 and food brand Uni-President Enterprises Corp. fell 0.65 percent to end at NT$76.50, while Formosa Petrochemical Corp. rose 1.50 percent to close at NT$101.50 and textile producer Far Eastern New Century Corp. ended unchanged at NT$28.80.
In the financial sector, which closed down 0.07 percent, CTBC Financial Holding Co. fell 0.72 percent to end at NT$20.75 and Shanghai Commercial & Savings Bank lost 1.46 percent to close at NT$54.00, while Cathay Financial Holding Co. gained 1.09 percent to end at NT$41.60.
"Unless (U.S. President Donald) Trump tweets any lead about the Washington-Beijing trade dispute, the local main board is expected to continue its consolidation in a range between 10,800 and 11,000 points in the short term," Huang said.
Source: Focus Taiwan News Channel
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