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Taiwan shares end lower on technical correction

2019/01/16 17:59:44

CNA file photo

Taipei, Jan. 16 (CNA) Shares in Taiwan moved lower Wednesday as investors rushed to lock in the gains posted a session earlier, when the main board soared more than 1 percent, dealers said.

Selling focused on large cap stocks, in particular in the bellwether electronics sector amid concerns over economic fundamentals at a time of weakening global demand, while heavyweights in the petrochemical, textile and financial sectors also faced downward pressure, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended down 42.23 points, or 0.43 percent, at the day's low of 9,763.81, off a high of 9,803.99, on turnover of NT$94.76 billion (US$3.07 billion).

The market opened down 0.25 on a technical correction from the previous session as investors shrugged off the gains posted on U.S. markets, where the Dow Jones Industrial Average closed up 0.65 percent and the tech savvy Nasdaq index ended up 1.71 percent, dealers said.

Downward pressure continued, while the Taiex moved in a narrow range throughout the session before last ditch selling focused on select market heavyweights, including contract chipmaker Taiwan Semiconductor Manufacturing Co., and pushed down the broader market to end at the day's low, they said.

"Yesterday's rally prompted investors to take profit today and I think the losses were largely technical in nature," Mega International Investment Services Corp. analyst Alex Huang said.

"The silver lining was that the Taiex managed to close above the 60-day moving average of around 9,741 points, so the downturn did not hurt the main board too much technically," Huang said.

Selling intensified in the late trading session due to worries over global demand which will continue to affect the profitability of Taiwanese exporters in 2018, he added.

Among the falling large cap tech stocks, TSMC, the most heavily weighted stock on the local market, fell 1.58 percent to close at the day's low of NT$217.50 with 28.96 million shares changing hands. Led by TSMC, the semiconductor sub-index ended down 0.89 percent.

In the semiconductor sector, ASE Technology Holding Co, the world's largest integrated circuit packaging and testing services provider, closed unchanged at NT$58.60, but came off an early high of NT$59.00 due to the late trading selling.

Also in the tech sector, shares in Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., lost 0.83 percent to end at NT$3,570.00 and iPhone assembler Hon Hai Precision Industry Co. dropped 0.14 percent to close at NT$70.20.

Huang said non-high tech stocks also felt the pinch from the late session selling with Formosa Plastics Corp. down 0.49 percent to close at NT$101.00, and Formosa Chemicals & Fibre Corp. down 0.47 percent to end at NT$105.50.

In the financial sector, which fell 0.71 percent, Fubon Financial Holding Co. lost 1.35 percent to close at NT$44.00 and Mega Financial Holding Co. dropped 0.76 percent to end at NT$26.00 as they saw selling escalate in the late session.

"Turnover remained low today, indicating many investors preferred to stay on the sidelines before an investor conference scheduled by TSMC for tomorrow," Huang said. "Its guidance for the first quarter and even for 2018 as a whole will matter to the movement of the Taiex."

Huang said investors should remain alert over the on-going earnings season on Wall Street, which could move global financial markets.

According to the TWSE, foreign institutional investors sold a net NT$1.37 billion worth of shares on the main board Wednesday.

(By Frances Huang)