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Taiwan shares end flat after recovering from early losses

2019/06/17 19:09:24

Taipei, June 17 (CNA) Shares in Taiwan closed little changed Monday as select heavyweight suppliers of Apple Inc. posted gains, offsetting a falling Taiwan Semiconductor Manufacturing Co. (TSMC), shares of which were dumped in the wake of losses suffered by U.S. chipmakers at the end of last week, dealers said.

Buying also rotated to some old economy stocks, in particular in the cement and property sectors, as well as the financial sector, which lent support to the broader market, the dealers said.

However, they went on, turnover remained thin as many investors here stayed on the sidelines before a two-day policymaking meeting scheduled by the U.S. Federal Reserve to begin Tuesday.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 5.87 points, or 0.06 percent, at 10,530.54, after moving between 10,474.19 and 10,562.97, on turnover of NT$87.80 billion (US$2.79 billion).

The market opened down 0.34 percent and fell further to the day's low at around 9:30 a.m. as investors cut their TSMC holdings.

The investors took their cues from a downturn of U.S. integrated circuit maker Broadcom Inc. Friday after it cut its sales guidance because of Washington's sanction on one of the U.S. firm's clients, Chinese telecom equipment maker Huawei Technologies, the dealers said.

However, buying emerged to boost some major Apple concept stocks, such as iPhone assembler Hon Hai Precision Industry Co. and smartphone camera lens maker Largan Precision Co., as well as select non-tech stocks, to help the broader market recoup its earlier losses and return to the 10,500-point mark by the end of the session, they said.

"The thin trading volume shows that the session was very quiet," Concord Securities analyst Kerry Huang said. "Until the Fed comes to its conclusion after the meeting, many investors preferred to stay on the sidelines and do nothing for the moment."

With trade friction between the United States and China escalating, the global financial markets have embraced hopes that the Fed will cut interest rates later this year to stabilize the economy, the dealers said.

"I do not expect the Fed to kick off a rate cut cycle this time, but it is worth watching what the U.S. central bank will say about the economy for more clues about its altitude toward the monetary policy," Huang said.

As a result, the local main board moved in consolidation mode throughout the session with the bellwether electronics sector in focus, Huang said.

"Selling in TSMC showed concern over the impact from Huawei after Broadcom cut its sales forecast due to Huawei, as the Chinese firm is an important client of the Taiwanese chipmaker," Huang added.

TSMC, the most heavily weighted stock in the local market, fell 1.27 percent to close at NT$233.00, but came off an earlier low of NT$230.50, with 50.94 million shares changing hands.

The bellwether electronics sector lost 0.30 percent to end at 414.45, off an early low of 411.83.

"Fortunately, Hon Hai and Largan bucked the downturn of TSMC, giving some support to the broader market," Huang said.

Hon Hai, which moved above the previous closing level throughout the session, rose 1.73 percent to close at NT$76.40 and Largan gained 2.89 percent to end at NT$3,735.00 after hitting a low of NT$3,625.00, while Catcher Technology Co., a metal casing supplier for iPhones and iMacs, fell 0.23 percent to close at NT$217.00.

"While the tech sector was generally weak, investors tended to park their funds in old economy and financial stocks as a safe haven during the session," Huang said.

Among the gaining old economy stocks, Taiwan Cement Corp. rose 1.71 percent to close at NT$44.70, Asia Cement Corp. added 0.86 percent to end at NT$46.75 and King's Town Construction Co. jumped 3.68 percent to close at NT$29.60.

In the financial sector, which ended up 0.28 percent, Cathay Financial Holding Co. rose 0.85 percent to close at NT$41.65 and Fubon Financial Holding Co. added 1.26 percent to end at NT444.10.

"Market sentiment remained haunted by the Washington-Beijing trade dispute," Huang said. "Whether U.S. President Donald Trump and Chinese President Xi Jinping will talk at the upcoming G20 summit will be critical to future developments."

According to the TWSE, foreign institutional investors sold a net NT$3.75 billion-worth of shares on the main board Monday.

(By Frances Huang)
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