Shares in Taiwan closed marginally lower Monday, entering a consolidation phase, as sentiment remained bothered by concerns over a rate hike by the United States Federal Reserve, after a mixed U.S. jobs report released at the end of last week, dealers said.
The main board failed to rebound after it came off a high, but contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and some other large-cap semiconductor stocks showed resilience, preventing the broader market from falling further, dealers said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 11.94 points, or 0.08 percent, at 14,661.10, after moving between 14,632.79 and 14,753.03. Turnover totaled NT$188.17 billion (US$6.12 billion).
The market opened down 2.86 points but soon moved to the day’s high, as the bellwether electronics sector rebounded from the previous session, with investors shrugging off the losses on the U.S. markets Friday, when the Dow Jones Industrial Average fell 1.07 percent, dealers said.
However, some investors later shifted to the sell side, which pushed the broader market into negative territory and kept the Taiex in consolidation mode for the rest of the session, dealers said.
Pre-holiday market sentiment
“After the losses in recent sessions caused by worry over an aggressive Fed, investors here have become very cautious,” equity market analyst Andy Hsu said. “In addition, many investors are staying on the sidelines ahead of the three-day Mid-Autumn Festival weekend,” which starts Friday.
Investors need more data to gain some clues about the Fed’s next step at its scheduled meeting in September, as the U.S. jobs data for August was mixed and gave no leads, he said referring to the U.S. report that its non-farm payrolls grew by 315,000 while its unemployment rate rose to 3.7 percent last month.
The market had previously projected job gains would total 298,000 with the unemployment rate expected to hold at 3.5 percent.
On Monday, TSMC, the most heavily weighted stock on the local market, rose 0.21 percent to close at NT$486.00, while the electronics sector lost 0.21 percent.
“TSMC had been hit hard in recent sessions due to the concerns over a rate increase by the Fed,” Hsu said. “Today, it appeared stable, technically, despite its slide off a high.” On Friday, TSMC lost 1.12 percent to the day’s low.
Other tech stocks
Among the other semiconductor stocks, smartphone IC designer MediaTek Inc. rose 1.77 percent to close at NT$631.00, while United Microelectronics Corp. (UMC), a smaller contract chipmaker, shed 1.73 percent to end at NT$39.80 amid weakening demand for consumer electronics devices that use chips made on its mature processes.
Also in the tech sector, flat panel makers rode a wave of stabilizing TV screen prices, with AU Optronics Corp. rising 2.96 percent to close at NT$17.40, and rival Innolux Corp. gaining 0.41 percent to end at NT$12.10.
Hon Hai Precision Industry Co., an iPhone assembler, rose 0.47 percent to close at NT$108.00, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., dropped 1.28 percent to end at NT$1,925.00.
Outside tech sectors
The transportation sector, meanwhile, fell 0.71 percent, with container cargo shippers Yang Ming Transport Corp. and Wan Hai Lines Ltd. falling 0.42 percent and 2.31 percent, respectively, to close at NT$70.80 and NT$76.20.
Bucking the downturn, Evergreen Marine Corp., the largest container cargo shipping firm in Taiwan, rose 0.38 percent to end at NT$80.00.
Elsewhere in the old economy sector, Formosa Plastics Corp. rose 0.56 percent to close at NT$89.30, and Formosa Chemical & Fibre Corp. gained 1.04 percent to end at NT$67.70, while Formosa Petrochemical Corp. ended down 0.24 percent at NT$81.80.
China Steel Corp., the largest steel maker in Taiwan, added 1.54 percent to close at NT$29.00, while Tung Ho Steel Enterprise Corp. finished 0.92 percent lower at NT$53.70.
In the financial sector, which outperformed the broader mraket, rising 0.57 percent, CTBC Financial Holding Co. rose 1.53 percent to end at NT$23.25, and Mega Financial Holding Co. added 0.86 percent to close at NT$35.30, while Cathay Financial Holding Co. ended unchanged at NT$44.05.
“Amid rate hike expectations, the U.S. dollar continued to rise against the Taiwan dollar, which may prompt foreign institutional investors to move more funds out of Taiwan,” Hsu said, referring to the greenback’s gain of NT$0.122 to close at NT$30.710 Monday.
According to the TWSE, foreign institutional investors sold a net NT$3.07 billion worth of shares on the main board Monday.
Source: Focus Taiwan News Channel