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Taiwan shares end flat on tough U.S. stance on trade with China

2018/09/26 17:26:00

CNA file photo

Taipei, Sept. 26 (CNA) Shares in Taiwan continued to move in a narrow range and closed little changed Wednesday as the United States maintained its tough line on its trade dispute with China, dealers said.

Caution continued to dominate trading session before the U.S. Federal Reserve's two-day policymaking meeting concludes later in the day, they said.

Select old economy stocks, in particular Formosa Petrochemical Corp., served as anchors stabilizing the broader market, while the bellwether electronics sector generally edged lower, dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 4.66 points, or 0.04 percent, at 10,974.19, after moving between 10,947.29 and 11,007.35, on turnover of NT$106.68 billion (US$3.48 billion).

The market opened down 4.77 points, reflecting a 0.26 percent fall in the Dow Jones Industrial Average and a 0.13 percent fall in the S&P 500 index overnight after U.S. President Donald Trump said at the United Nations General Assembly that his administration "will no longer tolerate abuse" on trade with China.

Taiwan's market continued to move in a narrow range for the rest of the session, and when the Taiex breached 11,000 points at one point, selling emerged to push the index into negative territory by the end of the session, they said.

"Technical hurdles ahead of 11,000 points remained high so many investors turned cautious," Hua Nan Securities analyst Henry Miao said. "Rising trade tensions between Washington and Beijing further dampened market sentiment."

"Before the mid-term elections in the U.S., I expect Trump will continue his tough stance on China so it's unlikely the two sides will resolve the dispute anytime soon," he said.

While the high-tech sector generally moved lower, buying rotated to select old economy stocks, led by Formosa Petrochemical, which boasts the second largest market capitalization after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC).

On the back of growing international crude oil prices, Formosa Petrochemical gained 2.82 percent to close at NT$146.00.

Among other old-economy stocks, food brand Uni-President Enterprises Corp. rose 0.88 percent to end at NT$79.80, and paper maker Cheng Loong Corp. soared 5.31 percent to close at NT$24.80.

The bellwether electronics sector closed down 0.05 percent as TSMC ended unchanged at NT$263.50 after hitting a low of NT$261.00.

Integrated circuit packaging and testing services provider ASE Technology Holding Co. fell 0.27 percent to close at NT$74.10, and IC designer MediaTek Inc. lost 0.82 percent to end at NT$241.50.

Firms rolling out passive electronics components such as chip resistors and multi-layer ceramic capacitors (MLCC) came under heavy pressure with Yageo Corp. down 3.16 percent to end at NT$490.00 and Wahsin Technology Corp. down 3.20 percent to close at NT$225.00.

Bucking the downturn, iPhone assembler Hon Hai Precision Industry Co. rose 1.58 percent to end at NT$77.30, and Largan Precision Co. added 1.07 percent to close at NT$3,970.00 as the two stocks staged technical rebounds from a recent slump.

"Turnover was thin today as many investors stayed on the sidelines, watching closely what the Fed will say after the meeting, which could reveal how it will adjust its monetary policy," Miao said.

"The market has come to a consensus that the Fed will raise its key interest rates today and in December," Miao said. "Many investors, however, are worried about the pace of rate hikes for next year."

According to the TWSE, foreign institutional investors bought a net NT$726 million in shares on the market Wednesday.

(By Frances Huang)
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