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Taiwan shares end flat after early gains

2018/08/17 17:23:09

Taipei, Aug. 17 (CNA) Shares in Taiwan closed little changed Friday after rising earlier in the session, with the market unable to remain above the 10,700-point mark at the end of the session, dealers said.

The profit-taking that appeared late in the session reflected caution among investors from lingering concerns over trade tensions between the United States and China, even if the two sides will hold talks later in the month to resolve the dispute, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, closed up 7.06 points, or 0.07 percent, at 10,690.96, after moving between 10,688.55 and 10,757.01, on turnover of NT$126.64 billion (US$4.12 billion).

The market opened up 0.18 percent and soon moved to the day's high on the back of a higher Wall Street, where the Dow Jones Industrial Average ended up almost 400 points higher overnight in the wake of the negotiations planned by Washington and China, dealers said.

But with the Taiex moving closer to the nearest technical resistance of the 240-day moving average of 10,779 points, investors started to move to the sell side to pocket their earlier gains, in particular in the bellwether electronics sector, dealers said.

White House economic advisor Larry Kudlow confirmed in an interview on Thursday that U.S. and Chinese officials will meet later this month to try to narrow their differences on trade issues.

"However, many investors in the region still have doubts about whether the two sides will get things settled anytime soon, so the initial upturn was eroded not only in Taipei, but also in other regional markets," KGI Securities analyst Phil Chu said, referring to markets such as Hong Kong and Shanghai.

"So even though the Taiex moved higher in the morning, investors appeared reluctant to chase prices and some even dumped their holdings, with selling escalating in the afternoon session," Chu said, adding that the thin turnover also demonstrated such caution.

Chu said the bellwether electronics sector faced considerable selling later in the session, with the sub-index closing down 0.14 percent at 434.14, off an early high of 438.65.

In the high-tech sector, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, rose 0.21 percent to close at NT$239.50 after hitting a high of NT$241.00, with 18.31 million shares changing hands.

iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, fell 0.12 percent to end at NT$81.10, off a high of NT$82.10, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., shed 1.99 percent to NT$4,430.00 after hitting NT$4,650.00.

"Passive component stocks also faced head winds to further cap the gains on the broader market as investors took profits in the afternoon," Chu said.

Companies that produce passive components, such as chip resistors and multi-layer ceramic capacitors (MLCC), have been perceived as the favorites of local investors.

Among them, Yageo Corp. lost 4.98 percent to close at NT$630.00, off a high of MT$689.00, and rival Walsin Technology Corp. also fell 3.33 percent to end at NT$261.00 after hitting NT$285.00.

"The silver lining was that old economy and financial stocks appeared resilient to lend some support to the broader market, or the Taiex could have ended in negative territory," Chu said.

Food brand Uni-President Enterprises Corp. rose 2.53 percent to close at NT$77.00, and Asia Cement Corp. gained 3.39 percent to end at NT$44.25.

In the financial sector, which rose 0.47 percent, SinoPac Financial Holding Co. gained 1.88 percent to close at NT$10.85, and CTBC Financial Holding Co. closed 0.95 percent higher at NT$21.15.

According to the TWSE, foreign institutional investors sold a net NT$5.96 billion in shares on the exchange Friday.

(By Frances Huang)
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