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Taiwan shares end flat as earlier gains eroded

2018/10/17 17:31:33

CNA file photo

Taipei, Oct. 17 (CNA) Shares in Taiwan closed little changed Wednesday, staying below 10,000 points, with earlier significant gains completely erased as investors rushed to lock in their gains, dealers said.

Many investors appeared cautious despite the earlier upturn, which resulted from a higher electronics sector, at a time when trade disputes between the United States and China remain unresolved, while the on-going earnings season also prevented investors from chasing prices for the moment, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended down 1.96 points, or 0.02 percent, at 9,979.14, after moving between 9,978.25 and 10,127.01, on turnover of NT$114.04 billion (US$3.70 billion).

The market opened up 0.67 percent and reached the day's high in the early morning session in the wake of a soaring Wall Street, where the Dow Jones Industrial Average closed up more than 500 points or 2.17 percent and the tech-savvy Nasdaq index ended up 2.89 percent overnight, dealers said.

Buying focused on the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) before some investors shifted to the sell side to pocket earlier profits, making it difficult for the Taiex to stay above 10,000 points by the end of the session, they said.

"Investors have turned very cautious about the outlook of the local equity market which has become technically weaker after plunging in recent sessions," Concord Securities analyst Kerry Huang said.

"A higher Wall Street, which boosted the local equity market initially, simply provided investors with a good opportunity to dump their holdings to take the money and run," Huang said.

Huang said the Washington-Beijing trade friction was still a concern which continues to haunt market sentiment.

"Many investors remain worried global demand in the first quarter of next year will weaken when the tariffs imposed (by Washington in September) on US$200 billion worth of Chinese goods rise to 25 percent at the end of this year from the current 10 percent."

As a result, Huang said, TSMC, the most heavily weighted stock on the local market, closed up only 0.63 percent at NT$238.50, off an early high of NT$243.00, with 42.47 million shares changing hands.

"Investors are just waiting for an investor conference scheduled by TSMC for tomorrow for its sales forecasts for the fourth quarter and all 2018," Huang said. "Amid fears over poor sales of the latest iPhones, TSMC, one of the most important suppliers to Apple Inc., could report disappointing guidance for the current quarter."

Among other Apple concept stocks, iPhone assembler Hon Hai Precision Industry Co. fell 3.27 percent to end at NT$68.10 after hitting a high of NT$71.00, while shares in smartphone camera lens supplier Largan Precision Co. closed unchanged at NT$3,300.00, off a high of NT$3,485.00.

Bucking the downturn suffered by its peers in the Apple supply chain, metal casing maker Catcher Technology Co. rose 2.79 percent to end at NT$313.50.

Profit taking also affected old economy and financial stocks with confidence in future market movement fragile, Huang said.

China Steel Corp., the largest steel maker in Taiwan, shed 1.23 percent to close at NT$24.15, off a high of NT$24.50, Formosa Plastics Corp. lost 0.96 percent to end at NT$103.00 after hitting NT$105.50, and Formosa Chemicals & Fibre Corp. dropped 0.87 percent to close at NT$114.50.

In the financial sector, shares in Cathay Financial Holding Co. lost 0.79 percent to end at NT$50.00 after hitting NT$50.80, while Mega Financial Holding Co. rose 0.19 percent to close at NT$26.65, off a high of NT$26.75.

"Moreover, many local investors are also afraid of more selling by foreign institutional investors, who have remained on the sell side recently," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$5.58 billion worth of shares on the main board on Wednesday.

(By Frances Huang)
Enditem/AW