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Taiwan shares end lower, led by 'Apple concept stocks'

2018/09/20 17:36:15

Taipei, Sept. 20 (CNA) Shares in Taiwan moved lower on Thursday as investors locked in the gains made by Taiwanese suppliers to U.S.-based consumer electronics giant Apple Inc. in the previous session, dealers said.

Although selling focused on "Apple concept stocks," such as iPhone assembler Hon Hai Precision Industry Co. and camera lens supplier Largan Precision Co., contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which is believed to supply processors for iPhones, and select non-tech stocks were more resilient and provided support to the broader market, they added.

Market sentiment remained cautious about the ongoing trade friction between the United States and China ahead of negotiations to resolve their disputes, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended down 25.86 points, or 0.24 percent, at 10,831.41, after moving between 10,814.54 and 10,908.36, on turnover of NT$131.99 billion (US$4.29 billion).

The market opened up 0.27 percent and soon rose to the day's high on follow-through buying from the earlier session, when the Taiex closed up 0.90 percent, but selling set in when the main board breached 10,900 points, dealers said.

Downward pressure continued, focusing on most of the major suppliers to Apple, pushing the Taiex into negative territory, though the appearance of bargain hunters looking to pick up TSMC and non-tech stocks, including Formosa Petrochemical Corp. and Cathay Financial Holding Co., prevented the Taiex from falling further by the end of the session, they said.

"I guess the buying of TSMC and some old economy and financial stocks largely came from government-led funds which aimed to help the main board close above the 240-day moving average of around 10,800 points," Ta Ching Securities analyst Jerry Chen said.

"However, the main board still ended lower because investors rushed to pocket gains posted by major Apple concept stocks in the wake of the losses incurred by American tech stocks overnight," Chen said. Among the falling Apple suppliers, shares in Hon Hai fell 1.05 percent to close at NT$75.60, Largan shed 1.68 percent to end at NT$3,860.00, and metal casing maker Catcher Technology Co. lost 4.12 percent to close at NT$337.50.

"Caution over those Apple concept stocks came as investors watch closely how the latest new iPhones are received in the market," Chen said. "There are fears that the high-priced new iPhone XS Max will turn consumers away."

The sell-off of shares in Apple suppliers boosted turnover on the main board Thursday, Chen said.

Fortunately, Chen said, TSMC, the most heavily weighted stock on the local market, remained in positive territory, up 0.78 percent to close at NT$260.00 with 29.62 million shares changing hands, and buying also spread to select old economy and financial stocks during the session.

Among the gaining non-tech stocks, Formosa Petrochemical rose 1.46 percent to close at NT$139.00, and Formosa Plastics Corp. added 0.44 percent to end at NT$113.50.

In the financial sector, which closed up 0.4 percent, shares in Cathay Financial gained 1.56 percent to end at NT$52.20, and CTBC Financial Holding Co. rose 1.61 percent to end at NT$22.15.

"The local main board moved in consolidation mode today after yesterday's technical rebound," Chen said. "The narrow range in trading reflected worries over trade tensions between Washington and Beijing."

"After Washington slapped a 10 percent tariff on US$200 billion worth of Chinese goods and Beijing retaliated earlier this week, I am pessimistic that the upcoming trade talks will yield any significant results," Chen said.

(By Frances Huang)
Enditem/AW