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Taiwan shares end below 10,500 points but HTC soars

2017/09/22 17:01

CNA file photo

Taipei, Sept. 22 (CNA) Shares in Taiwan came under heavy pressure to close below the 10,500-point mark Friday as large-cap suppliers to Apple Inc. took a beating, dealers said.

Concerns over possible foreign institutional selling also affected investors, who worried foreign investors may seek out U.S. dollar-denominated assets after the U.S. Federal Reserve hinted it could raise interest rates again this year, they said.

Shares of smartphone vendor HTC Corp. (宏達電) jumped, however, a day after it announced it was selling a portion of its smartphone assets to U.S.-based tech giant Google Inc. for US$1.1 billion in cash, dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE) closed down 128.76 points, or 1.22 percent, at 10,449.68, after moving between 10,446.45 and 10,579.02, on turnover of NT$119.64 billion (US$3.96 billion).

The market opened down 6.79 points and moved in a narrow range early in the session, but selling escalated at around 10 a.m. with heavyweights in the Apple supply chain, such as iPhone assembler Hon Hai Precision Industry Co. (鴻海) and smartphone camera lens maker Largan Precision Co. (大立光), taking a hit, dealers said.

Stiff downward pressure continued to the end of the session, pushing the weighted index below the nearest technical support around 10,467 points, the 60-day moving average, by the close, they said.

"Judging from the losses suffered by high-tech large cap stocks, I suspect the selling came largely from foreign institutional investors eager to pocket gains built up recently, in particular among the Apple suppliers," Ta Ching Securities analyst Andy Hsu said.

According to the TWSE, foreign institutional investors sold a net NT$7.85 billion in shares on the main exchange Friday, and they sold a net NT$20 billion in shares for the week.

"The Fed hinted in a policymaking meeting earlier this week that it will raise its key interest rates once by the end of the year, and investors turned cautious," Hsu said, pointing to a fall in the Dow Jones Industrial Average on Thursday, ending a nine-session winning streak, because of the prospects of a rate hike.

"With investors scrambling to lock in their recent gains, the bellwether electronics sector fell victim to the selling, with major Apple suppliers in focus," Hsu said.

The electronics index ended down 1.61 percent, underperforming other major sectors in the market.

Among the affected stocks, Largan shed 5.88 percent to close at NT$5,365.00, Hon Hai fell 2.70 percent to end at NT$108.00, and metal casing maker Catcher Technology Co. (可成) dropped 3.85 percent to close at NT$300.00.

Also in the high-tech sector, Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), which is believed to be supplying the A11 processor for the new iPhone production, lost 1.13 percent to end at NT$218.50.

Bucking the downturn, HTC gained 10 percent, the maximum daily increase, to close at NT$76.20 as investors reacted positively to the deal with Google, expecting that the large fund injection will improve the operations of the money-losing company, Hsu said.

Still, the general downturn did not bode well for the future of the overall market.

"The weighted index fell below the 60-day moving average today, making the main board technically weaker," Hsu said. "If the market fails to stage a significant rebound any time soon, more selling will follow."

Hsu said investors should keep a close eye on the movement of the U.S. dollar to get a better idea of the flows of foreign funds.

(By Frances Huang)Enditem/ls