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Taiwan shares come off low as TSMC recovers

2018/02/02 17:33:09

Taipei, Feb. 2 (CNA) Shares in Taiwan recouped part of their earlier losses to end moderately lower on Friday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) recovered from an early low by the end of trading, dealers said.

Amid rising fears over an interest rate hike cycle in the U.S. the local equity market was in consolidation mode, and market sentiment turned cautious ahead of the release of U.S. job data for January later in the day, they said.

The weighted index on the Taiwan Stock Exchange closed down 34.02 points, or 0.3 percent, at 11,126.23, after moving between 11,070.43 and 11,153.32, on turnover of NT$119.61 billion (US$4.10 billion).

The market opened down 8.6 points after a choppy session on Wall Street, reflecting an increase in 10-year U.S. treasury yield, which raised concerns about higher interest rates in the year, dealers said.

Selling continued with TSMC, the most heavily weighted stock on the local market, pushing the broader market closer to the nearest technical support at the 20-day moving average of 11,058 points, before bargain hunting emerged to offset the downward pressure by the end of the session, they said.

"With the 10-year treasury yield on the rise, market sentiment has been impacted with more and more investors fearing higher interest rates will drain funds from Wall Street down the road," Concord Securities analyst Kerry Huang said.

"TSMC, again, became the victim of such a negative lead, but it benefited from bargain hunting in the late trading session," Huang said. "I think the technical support around the 20-day moving average remains strong."

TSMC, the world's largest contract chipmaker, closed unchanged at NT$259.50 after hitting a low of NT$255.00, with 25.68 million shares changing hands.

Also in the semiconductor sector, which ended up 0.03 percent, shares in integrated circuit designer MediaTek Inc. fell 0.81 percent to close at NT$304.50 after investors locked in gains built in the previous session, while IC packaging and testing firm Advanced Semiconductor Engineering Inc. rose 2.58 percent to end at NT$41.70 in the wake of its strong bottom line in 2017.

Select "Apple concept stocks" reacted positively to Apple Inc's better-than-expected earnings for the October-December period which were announced overnight and boosted Apple shares by 3 percent in after-hours trading.

Among them, shares in iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization, rose 1.82 percent to close at NT$95.20, and Catcher Technology Co., a metal casing supplier to Apple, gained 6.00 percent to end at NT$353.50.

"Today's turnover fell to some extent from the earlier session as more investors became hesitant about trading with the Lunar New Year holiday approaching," Huang said. "So, non-high tech stocks generally remained sluggish throughout the session."

In the old economy sector, shares in Formosa Plastics Corp. shed 2.91 percent to close at NT$100.00, and Formosa Chemicals & Fibre Corp. lost 3.17 percent to end at NT$107.00.

"I think low turnover like this will continue until the holiday and consolidation mode also could continue," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$440.38 million worth of shares on the main board Friday.

(By Frances Huang)