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Taiwan shares end down, led by TSMC

2018/11/16 18:42:27

Taipei, Nov. 16 (CNA) Shares in Taiwan closed slightly lower Friday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) came under pressure, pushing down the broader market, dealers said.

However, old economy stocks in the cement, food and petrochemical sectors, as well as financial stocks, appeared resilient, which helped the broader market cap the downturn, although the main board still fell below the 9,800-point mark by the end of the session, the dealers added.

Turnover remained moderate as many investors remained on the sidelines, watching closely how trade tension between the United States and China will develop, as well as the outcome of local government elections scheduled for Nov. 24, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE) or Taiex ended down 29.37 points, or 0.30 percent, at 9,797.09, after moving between 9,770.87 and 9,851.29, on turnover of NT$116.24 billion (US$3.77 billion).

The market opened down 7.41 points on a mild technical correction from a session earlier, and soon regained its footing to move higher on the back of gains posted on the U.S. market, where the Dow Jones Industrial Average closed up 0.83 percent and the tech heavy-Nasdaq index ended up 1.72 percent overnight, the dealers said.

But after the Taiex breached 9,800 points, selling set in, with TSMC, the most heavily weighted stock in the local market, in focus amid worries about the chipmaker's sales at a time of a weakening Bitcoin, which could hurt global demand for weakening demand for mining devices used for cryptocurrency transactions, they said.

"Mining devices account for about 10 percent of TSMC's total sales," said Hua Nan Securities analyst Kevin Su. "The latest weakness of Bitcoin has renewed concerns over TSMC's sales." Overnight, Bitcoin fell below the US$6,000 mark to its lowest level since October 2017.

TSMC fell 2.16 percent to close at NT$226.00, with 46.74 million shares changing hands. Led by TSMC, the bellwether electronics sector fell 0.97 percent and the semiconductor sub-index ended down 1.96 percent.

In an investor conference held in mid-October, TSMC trimmed its sales growth forecast to 6.5 percent for 2018 from the previous forecast of a 7 percent-9 percent increase, with market analysts attributing the cut to weakening demand for mining devices.

Also in the high-tech sector, integrated circuit designer MediaTek Inc. shed 4.97 percent to close at NT$220.00; Yageo Corp., a provider of passive components such as chip resistors and inductors, fell 0.64 percent to end at NT$310.00; and iPhone assembler Hon Hai Precision Industry Co. lost 0.27 percent to end at NT$74.30.

Bucking the downturn, Largan Precision Co., a smartphone camera lens supplier, gained 1.13 percent to close at NT$3,130.00.

"Fortunately, some bargain hunting in the non-tech sector offset the impact resulting from the weakness of the electronics sector," Su said. "So the market remained in a narrow range, moving around 9,800 points throughout the session."

Among the gaining old economy stocks, Formosa Petrochemical Corp. rose 0.90 percent to close at NT$112.00; food brand Uni-President Enterprises Corp added 1.63 percent to end at NT$74.80; and Asia Cement Corp. rose 1.65 percent to close at NT$33.95.

In the financial sector, which ended up 0.34 percent, CTBC Financial Holding Co. gained 1.93 percent to close at NT$21.10, and Mega Financial Holding Co. rose 0.38 percent to end at NT$26.50.

"As in recent sessions, trading volume remained thin today as market sentiment was still bothered by the Washington-Beijing trade dispute," Su said. "Investors are waiting for the upcoming G20 meeting in Argentina, where U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet."

"Moreover, next week's local government elections have created uncertainty, the last thing the financial market wants," Su said.

According to the TWSE, foreign institutional investors sold a net NT$640 million-worth of shares on the main board Friday.

(By Frances Huang)
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