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Taiwan shares end up as TSMC momentum continues

2018/07/23 17:33:05

Taipei, July 23 (CNA) Shares in Taiwan moved slightly higher Monday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) continued its upward movement from the earlier session, offsetting the impact of losses suffered by optoelectronics firms and other stocks, dealers said.

The limited gains on Monday also reflected fears that the local main board could suffer a major technical pullback as the benchmark weighted index moves closer to the critical 11,000-point mark, they said.

In addition, the market remains skittish after U.S. President Donald Trump said last week that his administration is prepared to impose tariffs on all Chinese imports to the U.S. -- up to US$500 billion -- if necessary, they added.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 14.78 points, or 0.14 percent, at 10,946.89, after moving between 10,901.75 and 10,984.84, on turnover of NT$146.33 billion (US$4.78 billion).

The market opened down 2.65 points and fell in the early morning session, but with TSMC continuing to rise on follow-through buying from the earlier session, the Taiex returned to an uptrend and rose to the day's high at around 10 a.m., dealers said.

However, with the Taiex moving closer to the psychological 11,000-point level, some investors shifted to the sell side, weakening gains by the end of the session, they said.

"There is strong technical resistance ahead of the 11,000-point mark," Hua Nan Securities analyst Kevin Su said. "It was no surprise that the main board fell into consolidation mode after Friday's (0.89 percent) gain."

"Moreover, uncertainty over trade disputes continues to impact investor sentiment, preventing many investors from chasing prices at the moment," Su said, adding that was why turnover on Monday fell below the daily average of about NT$150 billion seen in the previous five sessions.

Buying of shares in TSMC, the most heavily weighted stock on the local market, helped the main board close above the previous closing level, although the gains were capped, Su said.

TSMC gained 1.47 percent to close at NT$241.00 with 52.20 million shares changing hands after a 5.79 percent increase on Friday, following the chipmaker's issuing of third quarter sales guidance that was in line with market expectations.

Under performing the broader market, shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., lost 1.80 percent to end at NT$5,175.00, and rival Genius Electronic Optical Co. also shed 5.12 percent to close at NT$472.50.

Also in the electronics sector, integrated circuit designer MediaTek Inc. lost 3.04 percent to end at NT$272.00, and touch panel maker TPK Holding Ltd. fell 6.19 percent to close at NT$63.60.

Non-tech stocks closed mixed with Formosa Plastics Corp. up 0.93 percent to end at NT$108.50, Formosa Chemicals & Fibre Corp. up 0.88 percent to close at NT$114.00, but food brand Uni-President Enterprises Corp. down 0.87 percent to end at NT$80.10.

LCY Chemical Corp. gained 10 percent, the maximum daily increase, to close at NT$52.50 after U.S.-based investment firm KKR signed a deal to acquire the company for NT$47.8 billion.

"Consolidation is expected to continue without any new incentives for investors to trade," Su said. "Investors have to watch closely upcoming economic data in the U.S. market such as durable goods sales in the week, which could move Wall Street."

According to the TWSE, foreign institutional investors bought a net NT$6.72 billion worth of shares on the main board Monday.

(By Frances Huang)