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Taiwan shares end down in reduced turnover

2017/05/19 18:21:50

Taipei, May 19 (CNA) Shares in Taiwan slid Friday, extending the losses of a session earlier, amid rising concerns that the political uncertainty facing U.S. President Donald Trump will make it hard for him to push for tax reform and infrastructure investment, dealers said.

Turnover was also relatively low, limiting trading of large-cap stocks to within a narrow range that prevented the broader market from climbing out of its doldrums and shooting again for the 10,000-point barrier, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) closed down 21.83 points, or 0.22 percent, at 9,947.62, after moving between 9,947.14 and 9,979.73, on turnover of NT$69.65 billion (US$2.31 billion).

The market opened up 0.95 points and rose to the day's high in the morning, as investors were encouraged by the rebound staged on Wall Street overnight after plunging Wednesday when talk of Trump possibly facing impeachment picked up, dealers said.

But the local market soon lost its momentum, as many market heavyweights in both the electronics and non-high-tech sectors trended lower, keeping the weighted Taiex in negative territory to the end of the session, they said.

"Although Wall Street staged a technical rebound, the gains failed to completely cover the more than 300-point plunge in the Dow Jones Industrial Average on Wednesday," KGI Securities analyst Phil Chu said.

"Many investors here still have fears that more volatility on Wall Street will follow amid the current political turmoil."

Media reports in the U.S. said Trump asked former FBI Director James Comey to end an investigation into his former national security adviser Michael Flynn related to Flynn's connections with Russia, an allegation Trump has denied.

The U.S. Justice Department has appointed a special counsel to investigate the allegations and any connections between Trump's campaign and administration and the Russians.

"While the chance of an impeachment is small, the market is concerned that Trump will see his tax cut and infrastructure projects undermined. Investors here have been watching to see how the situation plays out and preferred to be cautious at this time," Chu said.

Chu said selling in the electronics sector continued, with contract chip maker Taiwan Semiconductor Manufacturing Co. (台積電), the most heavily weighted stock in the local market, down 0.25 percent to close at NT$203.00.

Also in the high-tech sector, Largan Precision Co. (大立光), a smartphone camera lens supplier to Apple Inc., fell 0.93 percent to close at NT$4,810.00, while Hon Hai Precision Industry Co. (鴻海), an assembler of iPhones and iPads, fell 0.49 percent to end at NT$101.50.

Bucking the downturn, display panel maker Innolux Corp. (群創) soared 4.26 percent to close at NT$13.45 after it reported earnings per share of NT$0.42 in April, up 268 percent from a year earlier, on the back of strong demand.

Among the falling non-high-tech stocks, Formosa Plastics Corp. (台塑) fell 0.56 percent to end at NT$88.00, while Cathay Financial Holding Co. (國泰金) lost 0.81 percent to close at NT$49.00.

According to the TWSE, foreign institutional investors sold a net NT$1.23 billion in shares on the main exchange Friday.

(By Frances Huang)