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Taiwan shares end down amid worries over China growth

2019/01/14 18:13:32

Taipei, Jan. 14 (CNA) Shares in Taiwan closed lower Monday as market sentiment was dampened by concerns over China's economic growth in the wake of disappointing Chinese trade data for December, dealers said.

Investors also turned cautious because of concerns of stiff technical resistance ahead of the 60-day moving average of 9,744 points and uncertainty from the ongoing earnings season, limiting trading volume, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 51.18 points, or 0.52 percent, at 9,708.22, after moving between 9,677.49 and 9,762.37, on turnover of NT$71.49 billion (US$2.32 billion).

The market opened down 0.22 percent on a technical correction from a session earlier, when the Taiex closed up 0.40 percent, but soon regained its footing in the morning to return to positive territory, dealers said.

When the Taiex moved above the 60-day moving average, however, selling re-emerged as investors reacted to losses seen in regional markets such as Shanghai, Shenzhen and Hong Kong.

Their selling focused on large cap stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) ahead of its investor conference scheduled for Thursday, they said.

"China's December trade data was largely hit by trade tensions between the United States and China," Xincheng International Investment Consulting analyst Chang Chih-cheng said.

In December, China's exports unexpectedly fell 4.4 percent from a year earlier, the biggest monthly drop in two years, while its imports also fell 7.6 percent, the biggest decline since July 2016.

"The trade report has raised concerns over the Washington-Beijing dispute, and as long as the issue is not resolved, sentiment in the global financial markets is expected to be weakened," Chang said.

"In Taiwan, that weak sentiment held back many investors from jumping into the market, limiting today's trading volume."

Chang said investors here also seized on the strong technical resistance ahead of the 60-day moving average to sell large cap stocks and pocket the gains they made last week, when the Taiex rose 4.02 percent.

Among the falling market heavyweights, TSMC, the most heavily weighted stock in the local market, fell 0.91 percent to close at NT$218.50, with 17.60 million shares changing hands.

"Investors have been anxiously awaiting TSMC's results for the fourth quarter of last year and guidance for the first quarter of this year," Chang said. "Investors were being careful before the real numbers and forecast come out."

Also in the bellwether electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 1.01 percent to end at NT$68.70, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., bucked the downturn, rising 0.56 percent to close at NT$3,570.00.

The financial sector closed down 0.81 percent as large foreign exchange losses suffered by insurance firms under financial holding companies for the fourth quarter continued to fuel a selloff.

Among the big financial stocks, Cathay Financial Holding Co. fell 2.52 percent to close at NT$44.40, and Fubon Financial Holding Co. lost 2.07 percent to end at NT$45.00, while Mega Financial Holding Co. gained 0.19 percent to close at NT$26.05.

In the mixed old economy sector, Taiwan Cement Corp. fell 2.20 percent to close at NT$35.60, and Formosa Petrochemical Corp. lost 0.90 percent to end at NT$109.50, while food brand Uni-President Enterprises Corp. rose 0.28 percent to close at NT$71.30.

"I think selling in these large cap stocks largely came from foreign institutional investors," Chang said.

According to the TWSE, foreign institutional investors sold a net NT$4.21 billion in shares on the market Monday.

(By Frances Huang)