Shares in Taiwan closed slightly lower Friday after recouping most of the earlier losses caused by a plunge on U.S. markets overnight, in the wake of ongoing concerns over geopolitical tensions, dealers said.
The bellwether electronics sector remained in the doldrums throughout the session amid concerns over the next monetary tightening move by the U.S. Federal Reserve, while the tourism sector continued to gain on hopes of border easing, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 36.22 points, or 0.20 percent, at 18,232.35, after moving between 18,098.52 and 18,262.96. Turnover totaled NT$302.89 billion (US$10.86 billion).
The market opened down 18.20 point, or 0.10 percent and soon dropped by about 170 points with market sentiment hurt by the heavy losses on the U.S. markets, where the Dow Jones Industrial Average fell 1.78 percent and the tech-heavy Nasdaq index shed 3.74 percent Thursday amid escalating tensions between Russia and Ukraine, dealers said.
Russia-Ukraine tensions
According to international news wires, Ukraine on Thursday claimed pro-Russian separatists in the east of the country opened fire on civilian territory, while U.S. President Joe Biden warned that the threat of Moscow invading Kiev is “very high,” saying an attack could come within “the next several days.”
After 11 a.m. of Friday, bargain hunters turned active on the local equity market to bring old economy stocks into focus, in particular in the tourism sector as well as the shipping industry, offsetting the downturn suffered by large cap semiconductor stocks and helping the broader market recoup most of its earlier losses by the end of the session, dealers said.
“After falling substantially in recent sessions with market sentiment spooked by the on-going Russia-Ukraine tensions, it appears the Taiex saw some technical support as it moved closer to 18,000 points today,” Hua Nan Securities analyst Kevin Su said, adding strong technical support is expected ahead of the 60-day moving average of 17,974 points.
“The old economy sector served as an anchor stabilizing the broader market, while the tech sector remained weak, led by semiconductor heavyweights,” Su said. “The expanded turnover showed many investors are willing to hunt for bargains among old economy stocks for the moment.”
The tourism sector outperformed the broader market, rising 0.76 percent after the Central Epidemic Command Center said Thursday that it is planning to allow the entry of business travelers, starting in March, and also to shorten the quarantine time for all arrivals.
Among the rising tourism stocks, Phoenix Tours International, Inc. soared 8.44 percent to close at NT$59.10, and Lion Travel Service Co. gained 3.41 percent to end at NT$106.00. In addition, Formosa International Hotels Corp. rose 1.48 percent to close at NT$171.00, and Chateau International Development Co. gained 5.33 percent to end at NT$35.30.
Airline stocks kept steaming ahead to give a boost to the transportation sector which rose 4.38 percent, with shares in China Airlines soaring 2.26 percent to close at NT$31.70 and rival EVA Airways rising 0.57 percent to end at NT$35.00.
Buying was also seen among shipping stocks, pushing the transportation sector even higher. Riding the wave of growing freight rates, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 5.99 percent to close at NT$141.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 4.02 percent and 6.28 percent, respectively, to end at NT$116.50 and NT$194.50.
Elsewhere in the old economy sector, Formosa Plastics rose 0.47 percent to close at NT$106.00 and Nan Ya Plastics Corp. gained 0.45 percent to end at NT$89.10. Meanwhile, egg, meat and edible oil supplier Great Wall Enterprises Corp. grew 3.37 percent to close at NT$55.20.
Tech sector
“The electronics sector lost its momentum today with semiconductor stocks under the spotlight as fears over how the Fed will tighten its monetary policy continue to weigh on stocks with relatively high valuations,” Su said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, lost 1.24 percent to close at NT$637.00. Led by TSMC, the electronics sector lost 0.55 percent with the semiconductor sub-index down 0.95 percent.
Among other falling semiconductor stocks, United Microelectronics Corp. fell 1.29 percent to close at NT$53.70 and smartphone chip designer MediaTek Inc. dropped 0.88 percent to end at NT$112.00.
Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co. lost 0.47 percent to close at NT$105.50, while printed circuit board supplier Nan Ya PCB Corp. bucked the downturn, rising 2.10 percent to end at NT$536.00 and Yageo Corp., the world’s third largest multi-layer ceramic capacitor maker, gained 1.18 percent to close at NT$473.00.
“I expect the U.S. markets will continue to see volatility before the Fed’s next policymaking meeting (scheduled for March 15-16), and geopolitical tensions will send more ripples through the global markets,” Su said. “The Taiex could keep moving in consolidation in the near term.”
Despite the fall on the Taiex, foreign institutional investors bought a net NT$1.16 billion worth of shares on the main board Friday, according to the TWSE.
Source: Focus Taiwan News Channel