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Taiwan shares end down after briefly breaching 11,000 points

2018/05/22 18:01:58

Taipei, May 22 (CNA) Shares in Taiwan closed moderately lower Tuesday as investors locked in gains built earlier in the session and the previous day amid fears over a possible major pullback after the main board breached 11,000 point, dealers said.

Turnover remained moderate, indicating investors appear reluctant to chase prices for the moment, even though concerns over an immediate trade war between the United States and China receded after the two sides agreed not to impose tariffs on each other's products, they said.

The weighted index on the Taiwan Stock Exchange or the Taiex ended down 27.47 points, or 0.25 percent, at the day's low of 10,938.73, off an early high of 11,034.12, on turnover of NT$133.95 billion (US$4.48 billion).

The market opened up 0.19 percent and rose further to breach the 11,000 point mark at around 9:30 a.m. on follow-through buying from Monday, when the Taiex closed up 1.25 percent in the wake of eased fears over trade friction between Washington and Beijing, dealers said.

However, selling soon set in with large cap stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and Formosa Plastics Corp. in focus, which eroded earlier gains and pushed the broader market into negative territory by the end of the session, they said.

"As the main board has attempted to close above the 11,000 point mark several times over the past few months but failed, it was understandable that investors became more cautious when the Taiex breached that level this morning," KGI Securities analyst Phil Chu said.

"Today's moderate turnover was evidence that many investors remain unwilling to raise their holdings despite yesterday's strong showing," Chu said.

Hua Nan Securities analyst Henry Miao said there is still no final deal with exact terms as to how the U.S. and China will resolve their trade dispute, which kept investors from buying more.

Chu said market heavyweights generally moved into the doldrums which held back the upturn of the broader market.

TSMC, the most heavily weighted stock on the local market, closed unchanged at NT$229.00 after hitting NT$233.50, while iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, fell 1.18 percent to end at NT$84.00, off an early high of NT$85.40.

In the non-high tech sector, shares in Formosa Plastics Corp. shed 2.67 percent to close at NT$109.50, and Formosa Chemicals & Fibre Corp. lost 1.27 percent to end at NT$116.50.

Bucking the downturn on the broader market, shares in integrated circuit designer MediaTek Inc. rose 2.07 percent to close at NT$320.50 on reports the company has secured orders from Apple Inc. for speaker HomePod production.

On the back of rising passive electronics component prices, Walsin Technology Corp. rose 10 percent, the maximum daily increase, to close at NT$340.00, and Holy Stone Enterprise Co. added 2.12 percent to end at NT$241.00.

"The main board needs some time to digest pressure ahead of 11,000 points," Chu said. "But, after consolidation, I think, the Taiex will return to an upturn pattern."

(By Frances Huang)