Taipei, July 21 (CNA) Shares in Taiwan continued the downturn from the previous session to end lower on Friday as the bellwether electronics sector moved lower, led by large-cap stocks, as local investors shrugged off the gains posted by the tech-heavy NASDAQ index in the U.S. market overnight, dealers said.
Sentiment remained cautious during the on-going earnings season on Wall Street, with many investors preferring to stay on the sidelines before gathering more information about earnings in the global technology business in the second quarter and industrial outlook for the third quarter, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed down 62.66 points, or 0.60 percent, at 10,436.70, after moving between 10,428.47 and 10,477.72, on turnover of NT$84.21 billion (US$2.77 billion).
The market opened down 0.29 percent, although tech stocks listed in the U.S. market moved higher for the 10th consecutive session. Selling on the local main board escalated with electronics heavyweights, in particular smartphone camera lens supplier Largan Precision Co. (大立光) suffering steep losses and pushing the weighted index lower by the end of the session, dealers said.
However, buying shifted to the local over-the-counter (OTC) market, where smaller cap stocks are traded, as investors dumped large cap stocks on the main board amid fears of a further pullback in the weighted index, they said. The index on the OTC market ended up 0.33 percent at 138.61 points on Friday.
"After consolidating in recent sessions, with the failure of the main board to overcome stiff technical resistance ahead of the 10,545 point mark, many investors seem to have lost patience and preferred to pocket their money for the moment," KGI Securities analyst Phil Chu said.
The 10,545 point level was the intraday high on June 27 for the main board, since when the market has failed to breach the mark, creating downward pressure.
"Today's selling focused on select large-cap high-tech stocks, which accelerated the fall on the broader market as I think foreign institutional investors stood on the sell side," Chu said.
According to the TWSE, foreign institutional investors who own a large chunk of Taiwanese high-tech stocks, sold a net NT$4.81 billion worth of shares on the main board on Friday.
Among the falling electronics stocks, Largan, the most expensive stock on the local market, fell 2.78 percent to close at NT$5,425.00. Chu said that the selling of Largan shares came as investors took advantage of the stock's recent upturn to lock in their gains.
Also in the electronics sector, Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock on the local market and the largest contract chip maker in the world, fell 0.70 percent to end at NT$214.00. Shares in Hon Hai Precision Industry Co. (鴻海), the world's largest contract electronics maker, shed 1.29 percent to close at NT$115.00.
Non-tech stocks generally moved lower, increasing pressure on the broader market, dealers said.
In the non-tech sector, shares in China Steel Corp. (中鋼), the largest steel maker in Taiwan, shed 1.55 percent to close at NT$25.40 and Eclat Textile Co. (儒鴻) lost 0.40 percent to end at NT$370.50. Fubon Financial Holding Co. (富邦金) closed down 0.74 percent at NT$47.15.
"Today's moderate turnover was evidence of caution embraced by many investors who are waiting for the release of earnings by tech firms listed in the U.S. market such as Apple Inc., which could move the local electronics sector," Chu said.
(By Frances Huang)
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