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Taiwan shares plunge, led by 'Apple concept stocks'

2017/09/25 17:31:29

CNA file photo

Taipei, Sept. 25 (CNA) Shares in Taiwan took another beating on Monday, falling more than 100 points as selling continued to affect major Taiwanese manufacturers in the Apple Inc. supply chain, dealers said.

Market sentiment remained cautious because of expectations of a possible rate hike by the U.S. Federal Reserve after the Fed hinted in a policymaking meeting last week that it will raise its key interest rates one more time before the end of the year, they said.

Bucking the downturn on the broader market, smartphone brand HTC Corp. (宏達電) rose more than 6 percent on the back of a deal in which the company will sell part of its smartphone operations to U.S.-based Google Inc., dealers said.

The weighted index on the Taiwan Stock Exchange closed down 113.79 points, or 1.09 percent, at 10,335.89, after moving between 10,322.10 and 10,447.09, on turnover of NT$130.01 billion (US$4.30 billion).

The market opened down 7.63 points on follow-through selling from Friday, when the weighted index slid 1.22 percent, and downward pressure on major "Apple concept stocks" escalated amid worries over sales of the new iPhones unveiled globally on Sept. 12, dealers said.

Selling pushed the weighted index below 10,400 at around 9:30 a.m. and the weakness continued for the rest of the session, led by the bellwether electronics sector, to close at near the day's low, they said.

The electronics sector closed down 1.42 percent.

"There has been speculation that a shortage of components for the premier iPhone X will delay shipments of the model, which is expected to affect sales of many Taiwanese suppliers to Apple for the rest of this year," Concord Securities analyst Kerry Huang said.

Apple launched three new iPhone models -- the 5.8-inch iPhone X, the 5.5-inch iPhone 8 Plus and 4.7-inch iPhone 8 -- on the 10th anniversary of the device.

The iPhone 8 and iPhone 8 Plus went on sale globally on Sept. 22, and the iPhone X, with a significant upgrade in specifications will not go on sale until Oct. 27.

"In addition to worries over delayed iPhone X shipments, it seems that many consumers have put their replacement plans on hold, waiting for the 5.8-inch model instead of buying an iPhone 8 or iPhone 8 Plus," Huang said.

"So Apple concept stocks encountered turbulence today as investors simply locked in recent gains built in the sector."

Among the tumbling Apple suppliers, iPhone assembler Hon Hai Precision Industry Co. (鴻海) fell 2.78 percent to close at the day's low of NT$105.00, while metal casing supplier Catcher Technology Co. (可成) lost 4.50 percent to end at NT$286.50.

Smartphone camera lens producer Largan Precision Co. (大立光) reversed earlier gains, falling 0.65 percent to close at NT$5,330.00.

Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), which is thought to be supplying the processors for the new round of iPhones, lost 0.69 percent to end at NT$217.00.

"TSMC, the most heavily weighted stock in the local market, appeared resilient, or the weighted index would have fallen further," Huang said.

Outperforming the broader market, HTC gained 6.30 percent to close at NT$81.00 as the company is expected to book about NT$33 billion in gains from disposal of its smartphone assets to Google next year to boost earnings per share.

Selling spread to the non-high-tech sector with food brand Uni-President Enterprises Corp. (統一) losing 1.10 percent to close at NT$63.00, and Nan Ya Plastics Corp. (南亞) finishing 1.31 percent lower to end at NT$75.40.

"Technically speaking, after heavy losses in the last two sessions, I think the weighted index will take a breather soon," Huang said. "But it is possible selling will resume amid fears over a rate hike by the Fed."

Huang said that due to their relatively low valuations and hopes of a rate increase, financial stocks could attract bargain hunters in the short term.

The financial sub-index closed down 0.59 percent Monday.

(By Frances Huang)