Taiwan shares end slightly lower on profit-taking

Shares in Taiwan closed slightly lower Friday as the bellwether electronics sector finished off its early high and old economy and financial stocks faced downward pressure, dealers said.

The Taiex, the Taiwan Stock Exchange's weighted index, ended down 23.06 points, or 0.13 percent, at 17,818.31, after moving between 17,786.05 and 17,986.18. Turnover totaled NT$397.17 billion (US$14.29 billion).

The Taiex opened flat but quickly rose to the day's high as investors reacted to a 0.45 percent rise in the tech-heavy Nasdaq index and a 1.79 percent rise in the Philadelphia Semiconductor Index overnight, dealers said.

But selling then set in as investors became cautious, afraid of a major pullback ahead of 18,000 points.

"There were high technical hurdles at around 18,000 points and with the Taiex approaching that level, investors were less willing to chase prices, making it hard for the market to sustain its earlier gains," Concord Securities analyst Kerry Huang said.

"Turnover needed to expand to at least NT$500 billion for the Taiex to settle above the 18,000-point mark as in July," Huang said. "Today's turnover was not close to being high enough."

Huang said semiconductor stocks in the electronics sector largely remained resilient to close higher.

The electronics sector closed up 0.42 percent at 859.94, after hitting an earlier high of 867.60, and the semiconductor sub-index rose 0.65 percent.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, rose 0.12 percent to end at NT$618.00.

"It was not easy for TSMC to jump over technical barriers ahead of NT$638.00, making it unlikely that the Taiex will make a breakthrough in the short term," Huang said.

Among other semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker in Taiwan, rose 3.17 percent to close at NT$65.10, and integrated circuit designer MediaTek Inc. added 0.46 percent to end at NT$1,090.00, off a high of NT$1,120.00.

Bucking the upturn, IC packaging and testing services provider ASE Technology Holding Co. closed unchanged at NT$107.50, while Novatek Microelectronics Corp., which supplies drive ICs for flat panels, closed 2.13 percent lower at NT$483.00.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. fell 0.47 percent to close at NT$106.50, while power management solution provider Delta Electronics Inc. rose 0.38 percent to end at NT$261.00.

"Today, financial stocks pulled back, facing relatively heavy pressure throughout the session as investors took advantage of the sector's upturn in the previous sessions," Huang said. "But I think the losses were technical in nature."

In the financial sector, which fell 1.3 percent, Fubon Financial Holding Co. lost 2.09 percent to close at NT$74.80, CTBC Financial Holding Co. shed 2.02 percent to end at NT$24.25, Cathay Financial Holding Co. dropped 1.90 percent to close at NT$61.80, and E. Sun Financial Holding Co. ended down 1.07 percent at NT$27.65.

As for the old economy sector, shipping and airline stocks led the downturn, pushing the transportation sector lower by 2.10 percent.

Evergreen Marine Corp., the largest container cargo shipper in Taiwan lost 1.68 percent to close at NT$117.00 and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. fell 1.83 percent and 2.80 percent, respectively, to end at NT$107.50 and NT$156.00.

Amid concerns that a major shareholder could cut its stake, EVA Airways lost 3.89 percent to close at NT$27.20, and selling was also seen in rival China Airlines, which lost 2.47 percent to end at NT$27.65.

"Market sentiment here also remained affected by fears of inflation in the United States, which could prompt the Federal Reserve to move up the timeline for increasing interest rates," Huang said.

"Investors should keep a close eye on how the U.S. markets will move," he said.

Despite the fall in the Taiex, foreign institutional investors bought a net NT$8.04 billion in shares Friday, according to the Taiwan Stock Exchange.

Source: Focus Taiwan News Channel