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Taiwan shares end below 10,300 points

2017/09/26 17:11:35

Taipei, Sept. 26 (CNA) Shares in Taiwan extended their losses from a session earlier to close below the 10,300-point mark Tuesday as the bellwether electronics sector continued to fall, with selling focused on "Apple concept stocks" and semiconductor firms, dealers said.

Market sentiment turned cautious amid lingering worries over geopolitical tensions and more volatility on Wall Street, which have the potential to drag share prices down further, they said.

The weighted index on the Taiwan Stock Exchange closed down 78.87 points, or 0.76 percent, at the day's low of 10,257.02, off an early high of 10,374.54, on turnover of NT$121.24 billion (US$4.01 billion).

The market opened down 2.45 points but soon regained its footing on a mild technical rebound from a 1.09 percent decline seen a session earlier. As the weighted index moved closer to 10,400 points, however, selling re-emerged, with Apple suppliers targeted, dealers said.

The semiconductor sector also came under pressure after the Philadelphia Semiconductor Index slid 1.99 percent overnight, pushing the weighted index lower to the day's low at the end of the session, they said.

"Worries over sales of the iPhone 8 and iPhone 8 Plus (the latest iPhone models) continued to weigh on the stock market, casting a shadow over Apple concept stocks as has been the case recently," Mega International Investment Services Corp. analyst Alex Huang said.

Huang said he cannot figure out why Apple launched the iPhone 8 and iPhone 8 Plus, as their specifications are similar to those of previous models and appear less attractive than the features of the premium iPhone X.

The iPhone 8 and iPhone 8 Plus have gone on sale globally, but pre-order sales of the iPhone X are not scheduled until Oct. 27.

According to Huang, many consumers are waiting for the iPhone X and have put plans to replace their existing devices on hold for the time being.

"But even after the iPhone X goes on sale, there are fears of delayed shipments due to a lack of components," Huang said. "So Taiwanese Apple suppliers could have a fourth quarter without peak season effects despite the debut of the new iPhones."

Among the Apple concept stocks, iPhone assembler Hon Hai Precision Industry Co. (鴻海) fell 1.43 percent to close at NT$103.50, and smartphone camera lens supplier Largan Precision Co. (大立光) shed 4.03 percent to end at NT$5,115.00.

Seen as the sole supplier of the A11 processor for the new iPhones, Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, dropped 1.38 percent to close at NT$214.00.

Huang said TSMC's drop also resulted from losses incurred by other semiconductor companies in the U.S. overnight.

"Valuations of high-tech stocks on Wall Street remain high and they could face volatility down the road. So I think Taiwanese chip stocks such as TSMC could continue to feel the pinch," Huang said.

Bucking the downturn on the broader market, the financial sector closed up 0.34 percent as their relatively cheap share prices attracted bargain hunters, dealers said.

Mega Financial Holding Co. (兆豐金) gained 1.06 percent to close at NT$23.85, and Fubon Financial Holding Co. (富邦金) rose 0.75 percent to end at NT$46.90.

After falling below 10,300 points, "the weighted index could face more selling down the road at a time when global financial markets are being affected by non-economic factors," Huang said. "Few can be sure how political tensions related to North Korea will develop and how the market will react."

(By Frances Huang)