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Taiwan shares end below 10,600 as major Apple suppliers fall

2017/09/13 16:42:19

Taipei, Sept. 13 (CNA) Shares in Taiwan moved lower to close below the 10,600-point mark Wednesday as selling focused on the electronics sector, with firms in the Apple Inc. supply chain under pressure despite the launch of the next-generation iPhones overnight, dealers said.

Downward pressure spread to the non-high-tech sector as investors appeared reluctant to chase prices ahead of the nearest technical resistance level at around 10,650 points, the year's intraday high, recorded on Sept. 11, the dealers said.

Market sentiment remained haunted by concerns that foreign institutional investors will continue to unload their holdings after they recorded a net sell-off since the beginning of this month, they added.

The weighted index on the Taiwan Stock Exchange closed down 77.47 points, or 0.73 percent, at the day's low of 10,532.88, off an early high of 10,620.31, on turnover of NT$125.12 billion (US$4.17 billion).

The market opened down 0.13 percent and moved in a narrow range in the early morning session as investors ignored a higher Wall Street, where the Dow Jones Industrial Average closed up 0.28 percent to a new high and the tech-heavy NASDAQ index also ended at a new high, up 0.34 percent overnight, the dealers said.

Selling in large-cap stocks in the bellwether electronics sector escalated from the mid-morning session with Apple concept stocks in focus, pushing down the weighted index even further to its lowest level for the day at the close, they said.

"Investors simply took cues from the losses suffered by Apple on Tuesday, even though the U.S. consumer electronics giant launched its highly anticipated new iPhones on the 10th anniversary of the first model of the device," Hua Nan Securities analyst Henry Miao said.

Apple shares closed down 0.4 percent after rising about 1 percent at one point in the U.S. market after the company introduced the iPhone X -- the premium iPhone model -- equipped with a 5.8-inch organic light-emitting diode (OLED) edge-to-edge super-retina screen, with a starting price of NT$35,900 in Taiwan.

The new iPhone line also includes the 4.7-inch iPhone 8 and the 5.5-inch iPhone 8 Plus, carrying starting price tags of NT$25,500 and NT$28,900, respectively, in the local market.

Among the falling Apple concept stocks, Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), which is believed to supply the A11 processor for production of the new iPhones, lost 0.46 percent to close at NT$218.00, and iPhone assembler Hon Hai Precision Industry Co. (鴻海) dropped 1.28 percent to end at NT$115.50.

Largan Precision Co. (大立光), a camera lens supplier to Apple, shed 3.84 percent to close at NT$5,635.00, but remained the most expensive stock in the local market.

"Investors rushed to sell these Apple suppliers, as an upgrade of specifications of the new iPhones had been widely expected in the market due to a series of leaks from tech websites," Miao said. "The launch did not surprise the market, so that Apple shares fell and Taiwanese suppliers also followed suit."

"Investors want real sales numbers of the new iPhones before pouring more funds into these tech stocks," he added.

The non-high-tech sector also felt the pinch of downward pressure amid concerns over continued foreign institutional selling in recent sessions, Miao said. According to the TWSE, foreign institutional investors have sold a net NT$20 billion-worth of shares on the main board since Sept. 1 after a net sell of NT$9.14 billion on Wednesday.

Among the falling old economy stocks, Eclat Textile Co. (儒鴻) shed 2.01 percent to close at NT$340.50, Formosa Chemicals & Fiber Corp. (台塑化) fell 1.25 percent to end at NT$94.80, and Formosa Plastics Corp. (台塑) lost 0.84 percent to close at NT$95.30.

"It is possible for the weighted index to move lower as the equity market has turned technically weaker after today's fall, but I expect the short term technical support at a 20-day moving average of around 10,500 points," Miao said.

(By Frances Huang)
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