Shares in Taiwan closed flat Monday after giving up earlier gains as the bellwether electronics sector came under pressure dragging down the broader market, dealers said.
While select old economy stocks, in particular in the transportation and steel sectors, as well as the financial sector remained strong throughout the session, market sentiment was cautious over the ongoing military conflict between Russia and Ukraine, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 1.70 points at 17,263.04 after moving between 17,217.58 and 17,363.04. Turnover totaled NT$286.16 billion (US$10.04 billion).
The market opened up 0.13 percent and buying accelerated due to a technical rebound from a 0.97 percent fall a session earlier amid hopes that Russia and Ukraine came closer to a ceasefire agreement, dealers said.
Such hopes were raised by news that officials from the two countries involved in ceasefire negotiations gave an upbeat assessment, indicating the possibility of positive results within days.
After the Taiex rose almost 100 points to top the 240-day moving average of 17,338 points in the early morning session, selling emerged with large cap tech stocks in focus, offsetting the upturn enjoyed by old economy and financial stocks and pushing the main board into negative territory by the end of the session, dealers said.
“Despite hopes of a possible deal between Russia and Ukraine, the willingness to chase prices on the main board remained weak so investors tended to lock in profits after the Taiex staged a rebound,” Concord Securities analyst Kerry Huang said, adding lingering geopolitical tensions kept turnover moderate.
“Today, large tech stocks were highlighted by profit taking, sending the main board lower,” Huang said.
The index for the electronics sector closed down 0.46 percent at 805.88, after hitting a high of 813.02, with the semiconductor sub-index down 0.60 percent.
Among semiconductor heavyweights that came off highs, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, lost 0.52 percent to end at NT$572.00, and smartphone IC designer MediaTek Inc. fell 1.97 percent to close at NT$944.00, while United Microelectronics Corp., a smaller contract chipmaker, ended unchanged at NT$52.50.
Power management IC designer Silergy Corp. plunged 10 percent, the maximum daily decline, to close at NT$3,075.00 after a U.S.-based brokerage cut its target price and lowered its recommendation on the stock.
“Selling in the electronics sector also reflected concerns over a lockdown imposed in Shenzhen due to the growing number of COVID-19 cases, as many Taiwanese high tech firms have plants there,” Huang said. The lockdown was imposed Sunday and will continue until March 20.
As one of the largest tech investors from Taiwan in Shenzhen, Hon Hai Precision Industry Co. announced Monday morning that it has paused operations in the Chinese city, where it is engaged in development and new production introduction (NPI) of iPhones for Apple Inc. Hon Hai shares ended down 0.97 percent at NT$102.50.
PC brand Asustek Computer Inc. lost 0.54 percent to close at NT$369.50 after Ukraine urged the company to stop business in Russia until “the Russian aggression in Ukraine is fully stopped and fair order is restored.” Asustek remained silent on the appeal. Bucking the downturn, shares in rival Acer Inc. rose 1.56 percent to end at NT$29.25.
“Sustaining their strength, old economy and financial stocks served as an anchor stabilizing the broader market as investors withdrew from the tech sector,” Huang said. “Rotational buying focused on the transportation sector on hopes that shipping companies will announce generous cash dividend policies soon.”
In the transportation sector, which rose 2.46 percent, Evergreen Marine Corp., the largest container cargo company in Taiwan, rose 2.81 percent to close at NT$164.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 5.58 percent and 4.00 percent, respectively, to end at NT$132.50 and NT$182.00.
The steel sector rose 1.05 percent on growing raw material prices with China Steel Corp., Taiwan’s largest steel maker, up 0.91 percent to close at NT$38.80, and Tung Ho Steel Enterprise Corp. up 3.49 percent to end at NT$80.00.
Among financial stocks, Cathay Financial Holding Co. rose 1.49 percent to close at NT$61.20, Mega Financial Holding Co. gained 1.45 percent to end at NT$38.50, and CTBC Financial Holding Co. closed up 1.13 percent at NT$26.80.
“Investors should continue to pay close attention to whether Russia and Ukraine reach an agreement soon,” Huang said. “A ceasefire deal could help the Taiex challenge the 60-day moving average of around 18,000 points.”
According to the TWSE, foreign institutional investors sold a net NT$16.15 billion worth of shares on the main board Monday.
Source: Focus Taiwan News Channel