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Taiwan shares tumble, falling below six-month moving average

2018/04/20 18:30:28

Taipei, April 20 (CNA) Taiwan's shares fell nearly 2 percent Friday as electronics heavyweights tumbled on concerns over potentially sluggish sales and earnings in the second quarter.

The Taiwan Stock Exchange's benchmark index, the Taiex, slid 191 points, or 1.75 percent, to close at 10,779.38 on turnover of NT$155.336 billion (US$5.28 billion).

A grim second-quarter sales forecast issued by Taiwan Semiconductor Manufacturing Corporation (TSMC) on Thursday triggered a 3.12 percent plunge in the electronics sub-index and pushed the market below the six-month moving average of 10,792 at the close.

TSMC, the most heavily weighted stock in Taiwan's market, closed 6.34 percent lower at its 2018 low of NT$229, resulting in a fall in its market capitalization of NT$400 billion to NT$5.93 trillion.

Hon Hai Precision Industry Co., which assembles iPhones for Apple Inc., fell 1.18 percent to close at NT$84, while Largan Precision Co., which produces smartphone camera lenses for Apple, ended 2.01 percent lower at NT$3,420.

Most other electronics stocks also lost ground. MediaTek fell 1.66 percent to close at NT$354.5, and Catcher Technology plummeted 6.33 percent to end at NT$347.5.

TSMC's second quarter sales forecast of between US$7.8 billion and US$7.9 billion came in about US$1 billion lower than analysts expected, largely because of weakening demand for high-end smartphones, and affected markets around the world.

"TSMC's fall today can be viewed as a prelude to a weak performance by electronics shares in the second quarter," said Hua Nan Securities Investment Management Chairman David Chu (儲祥生).

"In the short term, investors should monitor the over-the-counter market and the consequences of the move by the United States to ban American companies from selling components to Chinese telecom equipment maker ZTE Corp. for seven years," Chu said.

Old-economy shares showed resilience Friday, with paper stocks gaining 1.8 percent, construction shares rising 0.47 percent and cement shares finishing 0.28 percent higher. Financial shares were down 0.21 percent.

Losers outnumbered gainers 441 to 319, with 155 remaining unchanged.

(By Chang Liang-chi and Flor Wang)