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Taiwan shares end below 9,800 points, led by tech heavyweights

2018/11/20 17:34:49

Taipei, Nov. 20 (CNA) Shares in Taiwan moved lower to end below the 9,800-point mark Tuesday as the bellwether electronics sector came under pressure in the wake of heavy losses suffered by tech stocks in the U.S. markets overnight, dealers said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, was in negative territory throughout the session, caused by a plunge in the Philadelphia Semiconductor Index in the U.S. Monday, the dealers said.

iPhone assembler Hon Hai Precision Industry Co., another large-cap tech stock, took a beating as investors were shocked by a report that Apple Inc. has cut back orders for the latest three iPhones due to weaker-than-expected global demand, they added.

The weighted index on the Taiwan Stock Exchange (TWSE) or Taiex, closed down 84.70 points, or 0.86 percent, at 9,743.99, after moving between 9,726.80 and 9,800.00, on turnover of NT$92.15 billion (US$2.98 billion).

The market opened down 0.40 percent as investors took cues from a 1.56 percent fall in the Dow Jones Industrial Average and a 3.30 percent drop in the tech-heavy Nasdaq index to dump their stocks, the dealers said.

Selling escalated as TSMC incurred more losses on the back of the Philadelphia Semiconductor Index's 3.86 percent plunge amid rising concerns over the outlook of the global integrated circuit industry, and Hon Hai's downward pressure also increased as investors were concerned over new iPhone sales, they said.

"The local main board largely reflected volatility among tech stocks in the U.S. markets," Mega International Investment Services Corp. analyst Alex Huang said. "It seemed that many investors have become wary of the business outlook of the global tech sector, in particular in the semiconductor industry."

In reflection of the tumble in the Philadelphia Semiconductor Index overnight, TSMC fell 1.80 percent to close at the day's low of NT$218.00, with 41.58 million shares changing hands.

Led by TSMC, the bellwether electronics sector ended down 1.05 percent and the semiconductor sub-index closed down 1.62 percent.

TSMC's selling spread to other semiconductor stocks, with ASE Technology Holding Co., the world's largest IC packaging and testing services provider, down 3.52 percent to end at the day's low of NT$57.60.

"Moreover, worries over sales of the three new iPhone models seemed to run deeper, sending Apple shares down 4 percent overnight, so Hon Hai got hammered today, dealing another blow to the broader market," Huang said, referring to a Wall Street report that Apple has cut back orders for the three new iPhones, in particular the more affordable iPhone XR.

Hon Hai shed 3.27 percent to close at the day's low of NT$71.00 on trading volume of 40.96 million shares. Among other falling Apple concept stocks, Catcher Technology Co., a metal casing maker, lost 0.57 percent to close at NT$202.50.

Bucking the downturn on the broader market, Largan Precision Co., a smartphone camera lens supplier, rose 2.49 percent to end at NT$3,315.00. "Largan's gains were technical after the stock had suffered heavy losses in recent sessions," Huang said.

He said some bargain hunters rushed to pick up select telecom and old economy stocks as a safe heaven. "Otherwise, the broader market would have fallen further," Huang said.

Chunghwa Telecom Co. gained 0.47 percent to close at NT$107.00, and Taiwan Mobile Co. rose 0.46 percent to end at NT$110.00, while textile maker Makalot Industrial Co. added 1.45 percent to close at NT$174.50, and President Chain Store Corp., the 7-Eleven convenience store chain operator, rose 0.47 percent to end at NT$321.50.

"Turnover remained thin and it was a typical trading session ahead of the Nov. 24 local government elections, which has created uncertainty in the market," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$7.03 billion-worth of shares on the main board Tuesday.

(By Frances Huang)