Taiwan shares end slightly lower as tech stocks appear muted

Shares in Taiwan closed slightly lower Monday after moving in a narrow range throughout the session, with many foreign institutional investors absent ahead of the upcoming Thanksgiving holiday.

Due to the reduced presence of foreign institutional investors, select large electronics stocks, in particular in the semiconductor industry, were stuck in the doldrums. Old economy stocks in the petrochemical, shipping and steel industries, meanwhile, staged a rebound.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 14.77 points, or 0.08 percent, at 17,803.54, after moving between 17,790.64 and 17,857.73. Turnover for the session totaled NT$312.97 billion (US$11.26 billion).

The market opened up 10.22 points and continued to fluctuate slightly around the previous closing level, before selling in the late trading session set in. This selling, focused on semiconductor heavyweights, pushed the Taiex down into negative territory by the end of the session.

"The session was very quiet as many foreign institutional investors stepped back from the trading floor for the upcoming Thanksgiving holiday," equity market analyst Andy Hsu said.

"With turnover reduced, large cap tech stocks, especially in the semiconductor industry, including TSMC (Taiwan Semiconductor Manufacturing Co.) became muted and the broader market followed," Hsu said. On Friday, turnover totaled NT$403.04 billion.

Due to the last ditch selling, TSMC, the world's largest contract chipmaker and the most heavily weighted stock in the local market, lost 0.49 percent to close at the day's low of NT$615.00. Led by TSMC, the electronics index ended down 0.08 percent at 859.22, off a high of 862.80.

"A slower TSMC had nothing to do with its fundamentals, as the chipmaker is expected to continue to generate large revenue this year and next year on the back of its strong competitive edge," Hsu said. "But, the stock has faced stiff technical resistance ahead of NT$620.00."

Among other semiconductor stocks that came off their earlier highs, United Microelectronics Corp., a smaller contract chipmaker in Taiwan, fell 0.61 percent to close at NT$64.70. Integrated circuit designer MediaTek Inc. dropped 0.92 percent to end at NT$1,080.00.

Bucking the downward trend, IC packaging and testing services provider ASE Technology Holding Co. gained 0.47 percent to close at NT$106.50, after reaching a high of NT$107.50.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. ended unchanged at NT$106.50. Power management solutions provider Delta Electronics Inc. dropped 0.77 percent to close at NT$259.00, while Yageo Corp., the world's third largest multilayer ceramic capacitor (MLCC) maker, rose 0.65 percent to end at NT$466.00.

"Non-tech stocks were largely moving at a small pace with some exceptions just bouncing back technically from recent losses. Their gains simply capped the losses but failed to vault the Taiex back to positive territory," Hsu said.

The transportation sector, where many shipping stocks were traded, rose 0.99 percent, with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, up 2.14 percent to close at NT$119.50. Rival Yang Ming Marine Transport Corp., meanwhile, gained 2.79 percent to end at NT$110.50.

In addition, bulk cargo shippers U-Ming Marine Transport Corp. rose 1.91 percent to close at NT$53.30, and Chinese Maritime Transport Ltd. gained 3.09 percent to end at NT$56.80.

In the petrochemical sector, which rose 0.33 percent, Formosa Plastics Corp. added 0.97 percent to close at NT$104.50, while Nan Ya Plastics Corp. gained 0.59 percent to end at NT$85.50.

Elsewhere, Tung Ho Steel Enterprise Corp. rose 1.43 percent to close at NT$42.45, and Chung Hung Steel Corp. gained 1.67 percent to end at NT$33.40. China Steel Corp., Taiwan's largest steel maker, closed unchanged at NT$32.60.

"Fortunately, a stronger Taiwan dollar has led many foreign institutional investors to keep local equities. I do not expect they will significantly cut their holdings anytime soon," Hsu said. "But a resurgence in COVID-19 cases in Europe could hurt sentiment among investors at home and abroad."

According to the TWSE, foreign institutional investors bought a net NT$962 million worth of shares on the main board Monday.

Source: Focus Taiwan News Channel