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Taiwan shares end lower, while TSMC lends support

2017/09/19 17:01:55

Taipei, Sept. 19 (CNA) Shares in Taiwan closed lower Tuesday after investors pocketed earlier losses by cutting their holdings in select large-cap stocks, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock, ended at the day's high to keep the broader market from falling further, dealers said.

Market sentiment toward the future movement of the main board turned cautious ahead of a two-day policymaking meeting scheduled by the U.S. Federal Reserve to kick off later in the day, as investors wanted to have more clues about how the Fed will implement a rate hike cycle, the dealers said.

The weighted index on the Taiwan Stock Exchange closed down 55.43 points, or 0.52 percent, at 10,576.14, after moving between 10,561.21 and 10,644.18, on turnover of NT$137.17 billion (US$4.56 billion).

The market opened up 0.20 percent and moved to the day's high in the wake of a higher U.S. market, where the Dow Jones Industrial Average closed up 0.28 percent at a record high overnight for the fifth consecutive session and the Philadelphia Semiconductor Index gained 1.21 percent, the dealers said.

After the weighted index hit the day's high, selling then set in, with investors rushing to cut their holdings in certain high-tech heavyweights such as iPhone assembler Hon Hai Precision Industry Co. (鴻海) and flat panel maker Innolux Corp. (群創), to drag down the broader market into negative territory, they said.

"Fortunately, TSMC remained resilient and maintained its strength throughout the session, which prevented the weighted index from more losses," Concord Securities analyst Kerry Huang said.

TSMC, the world's largest contract chip maker, gained 0.91 percent to close at the day's high of NT$221.50, with 23.37 million shares changing hands, offsetting losses suffered by other large-cap stocks on the main board.

Amid optimism toward its third-quarter sales in reflection of the peak season effect, TSMC extended its gains from a session earlier to push up its market capitalization to a record high of NT$5.74 trillion, which was also the highest among all stocks listed in Taiwan.

Among the losing stocks on the main board, Hon Hai, second to TSMC in terms of market capitalization, shed 3.51 percent to close at NT$110.00 after foreign institutional investors turned cautious over its relatively high valuation and cut their holdings in the stocks.

Also in the high-tech sector, Innolux lost 3.58 percent to end at NT$14.80, and rival AU Optronics Corp. (友達) shed 3.45 percent to close at NT$12.60 after investors locked in the two stocks' solid gains of a session earlier, while Largan Precision Co. (大立光), a smartphone camera lens supplier, rose 0.26 percent to end at NT$5,835.00.

With investor sentiment hammered by a government move to cap market speculation on its recent significant upturn, smartphone camera lens maker Genius Electronic Optical Co. (玉晶光) fell 10 percent, the maximum daily decline, to close at NT$425.50.

In the non-high-tech sector, Formosa Plastics Corp. (台塑) fell 1.25 percent to end at NT$94.80 and Nan Ya Plastics Corp. (南亞) lost 1.16 percent to close at NT$94.10. Cathay Financial Holding Co. (國泰金) dropped 1.23 percent to end at NT$48.10.

Huang said that many investors locked in their gains as they were waiting for the conclusion of the Fed meeting.

"Although the market expects that the Fed will not raise interest rates this time, its comments after the meeting could give an indication about whether a rate hike will take place in a meeting scheduled for December," Huang said.

After Tuesday's losses, Huang said, the weighted index could trend lower before finding the nearest technical support at around 10,462 points, the 60-day moving average.

(By Jackson Chang and Frances Huang)