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Taiwan shares end lower but hold above 10,700 points

2018/09/12 17:46:51

CNA file photo

Taipei, Sept. 12 (CNA) Shares in Taiwan moved lower Wednesday, extending the losses from the previous session, but late buying helped alleviate the losses and the market closed above the 10,700-point mark, dealers said.

Major suppliers in the Apple Inc. supply chain, such as smartphone camera lens maker Largan Precision Co. and iPhone assembler Hon Hai Precision Industry Co., came under pressure ahead of Apple's expected unveiling of its new iPhone models later in the day, dealers said.

Market sentiment remained bothered by worry about an escalation of the trade frictions between the United States and China, which kept the market in consolidation mode, they added.

The weighted index on the Taiwan Stock Exchange (Taiex) ended down 29.73 points, or 0.28 percent, at 10,722.57, after moving between 10,667.25 and 10,779.93. Turnover totaled NT$123.52 billion (US$4.01 billion) during the session.

The market opened up 0.1 percent and soon rose to the day's high on follow-through buying from the previous session, when the Taiex closed up 0.25 percent, but selling set in, pushing the broader market below the 10,700 mark at one point, dealers said.

Some bargain hunters then began buying large cap stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), particularly late in the trading session, which helped keep Taiex above the 10,700-point mark at the close, dealers said.

"I suspect the late buying was from government-led funds in a bid to prevent the main board from falling further," Ta Ching Securities analyst Jerry Chen said. "TSMC is one of the funds' favorites."

TSMC, the most heavily weighted stock on the local market, gained 0.19 percent to close at NT$260.50, off a low of NT$258.00, with 37.53 million shares changing hands.

Chen said government-led funds also bought large cap stocks in the non-high tech sector late in the session. Among them, Formosa Plastics Corp. ended unchanged at NT$111.00 after falling to a low of NT$109.50, and Mega Financial Holding Co. ended flat at NT$26.00, off a low of NT$25.80, while Chang Hwa Commercial Bank gained 0.56 percent to close at NT$18.10, off a low of NT$17.95.

"The late buying offset the pressure on select Apple suppliers," Chen said. "Ahead of the launch of the next generation iPhones later in the day, investors preferred to remain cautious, fearing Apple shares will fall as investors on Wall Street might lock in their gains after the debut of the new products."

Among the falling major Apple suppliers, Largan dropped 3.00 percent to close at NT$4,210.00, and selling also spread to other optoelectronics stocks like rival Genius Electronic Optical Co., which lost 2.94 percent to end at NT$346.50.

Meanwhile, Hon Hai, second only to TSMC in terms of market value, lost 0.90 percent to close at NT$77.00, and Catcher Technology Co., a metal casing supplier to Apple, fell 2.56 percent to end at NT$342.00.

"Despite the support from the government-led funds, the market continued to move in a narrow range as sentiment remained cautious amid the trade disputes between the U.S. and China," Chen said.

Concerns over the trade issues have escalated since U.S. President Donald Trump told the media Tuesday that Washington was taking a tough stance on Beijing, which means China might encounter difficulties in its trade negotiating with the U.S., Chen said.

He said that even if the Taiex makes a technical rebound, it could see strong resistance ahead of 10,800 points.

Foreign institutional investors sold a net NT$330 million worth of shares on the main board Wednesday, according to Taiex data.

(By Frances Huang)