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Taiwan shares dive below 10,400 points; Apple concept stocks suffer

2017/12/06 16:38:20

CNA file photo

Taipei, Dec. 6 (CNA) Shares in Taiwan plunged more than 170 points to close below the 10,400-point mark Wednesday as Apple concept stocks came under heavy pressure amid concerns over iPhone X shipments, dealers said.

Selling in Taiwanese Apple suppliers spread to the entire electronics sector and non-tech sectors to push down the broader market to a low not seen since the end of September, the dealers said.

The weighted index on the Taiwan Stock Exchange ended down 172.93 points, or 1.64 percent, at 10,393.92, after moving between 10,376.65 and 10,541.03, on turnover of NT$159.45 billion (US$5.32 billion). The closing level was the lowest since Sept. 30, when the weighted index ended at 10,383.94.

The market opened down 0.25 percent to breach a 120-day moving average of 10,543 points in the wake of a lower Wall Street, where the Dow Jones Industrial Average closed down 0.45 percent and the S&P 500 index ended down 0.37 percent, the dealers said.

Downward pressure escalated, in particular in the afternoon session, to drag down the weighted index below 10,400 points, with selling focusing on Apple concept stocks such as smartphone camera lens supplier Largan Precision Co., metal casing maker Catcher Technology Co. and iPhone assembler Hon Hai Precision Industry Co. in the wake of Largan's caution about December sales, they said.

"I think foreign institutional investors seized the Largan sales report as an excuase to pocket their gains built in the local equity market," Concord Securities analyst Alex Huang said.

"Before they are away from the trading floor for the Christmas holiday, it is possible that foreign institutional investors will dispose of more of local equities to close their books for the year," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$11.10 billion-worth of shares on the main board Wednesday.

On the back of an expectation that its December sales will fall below its November level, which has raised concerns over the iPhone X, Largan fell 9.83 percent to close at NT$4,265.00 after hitting a low of 4,260.00.

On Dec. 1, Largan dipped below the NT$5,000 mark for the first time since July 7, and the weakness continued. The stock has fallen 29 percent since Nov. 3, when it closed at its highest level at NT$5,985.

iPhone X sales worries also affected other suppliers, with Hon Hai down 2.72 percent to close at NT$93.00 and Catcher Technology Co. down 6.33 percent to end at NT$311.00.

Also in the electronics sector, which closed down 2.0 percent, contract chipmaker Taiwan Semiconductor Manufacturing Co., the most heavily weighted stock in the local market and also perceived as an Apple supplier, lost 1.09 percent to end at NT$227.00, with 32.33 million shares changing hands.

In the non-high-tech sector, which appeared resilient, Formosa Plastics Corp. lost 0.64 percent to close at NT$93.00, while food brand Uni-President Enterprises Corp. gained 1.09 percent.

"Today's sell-off has made the main board technically weaker and consolidation is likely to digest the remaining downward pressure," Huang said.

"Investors had better pay attention to the movement of tech stocks in the U.S. market, which will dictate the movement of their Taiwanese counterparts. There have been signs that investors in the U.S. have started to cut tech stock holdings and park their funds in financial stocks," Huang said.

(By Frances Huang)