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Taiwan shares end little changed amid geopolitical concerns

2018/05/25 17:34:16

Taipei, May 25 (CNA) Shares in Taiwan closed little changed Friday amid lingering geopolitical concerns after U.S. President Donald Trump cancelled a planned summit with North Korean leader Kim Jong Un, dealers said.

While electronics heavyweights generally remained in the doldrums and petrochemical stocks were hit by a tumble in international crude oil prices, iPhone assembler Hon Hai Precision Industry Co. and passive component makers attracted buying to lend support to the broader market, the dealers said.

The weighted index on the Taiwan Stock Exchange, or Taiex, ended up 5.37 points, or 0.05 percent, at 10,942.30, after moving between 10,918.12 and 10,977.81, on turnover of NT$127.90 billion (US$4.28 billion).

The market opened up 0.09 percent and moved to the day's high on follow-through buying from a session earlier, when the Taiex closed up 0.47 percent, the dealers said.

But with the index moving closer to the critical 11,000-point mark, the main board fell into consolidation mode as investors took cues from a fall on Wall Street, where the Dow Jones Industrial Average closed down 0.30 percent overnight due to Trump's decision to cancel the meeting with Kim that had previously been scheduled for June, they said.

Trump blamed North Korea's hostility for the cancellation.

After the cancellation, however, international media reported that Pyongyang is willing to talk with Washington "at any time, in any form."

"Few can be sure whether or when Trump and Kim will talk, and the situation remains unclear, so investors were reluctant to raise their holdings for the moment and some even disposed of liquid stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and Formosa Plastics Corp.," KGI Securities analyst Phil Chu said.

"The relatively thin turnover was also evidence of such caution amid geopolitical tension," Chu said.

TSMC, the most heavily weighted stock in the local market, fell 0.22 percent to close at NT$228.50 after hitting NT$229.50, with 15.90 million shares changing hands, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., ended down 0.13 percent at NT$3,995.00.

Among other falling large-cap stocks, Formosa Plastics shed 2.25 percent to end at NT$108.50 and Formosa Chemicals & Fibre Corp. also dropped 1.71 percent to close at NT$115.00 after crude prices in New York fell 1.6 percent overnight.

"Fortunately, Hon Hai remained resilient and posted gains to prevent the broader market from falling into negative territory," Chu said. "The buying in Hon Hai showed investor optimism toward a listing of subsidiary Foxconn Industrial Internet Co. Ltd.," in Shanghai likely by the end of May or early June.

Hon Hai, second to TSMC in terms of market value, rose 2.85 percent to close at NT$86.50 on trading volume of 50.54 million shares.

On the back of rising passive electronics component prices, Walsin Technology Corp. gained 8.28 percent to close at NT$340.00 and Holy Stone Enterprise Co. added 2.11 percent to end at NT$218.00.

"Strong technical resistance has been in place ahead of 11,000 points," Chu said. "I think the market needs some time to digest the pressure before having a takeoff, but an upswing trend in the longer term remains unchanged."

(By Frances Huang)