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Taiwan shares end down ahead of G20 summit

2019/06/25 17:25:12

Taipei, June 25 (CNA) Shares in Taiwan moved lower Tuesday on thin turnover as many investors were cautious ahead of the G20 summit, where U.S. President Donald Trump and Chinese President Xi Jinping will meet amid trade friction between their two countries, dealers said.

Selling focused on the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), while old economy and financial stocks generally weakened to push the broader market even lower, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 72.73 points, or 0.67 percent, at 10,706.72, after moving between 10,693.04 and 10,787.62. Turnover was NT$99.63 billion (US$3.21 billion).

The market opened down 2.27 points and moved in a narrow range early in the morning as investors reacted to the lackluster performance of U.S. markets overnight, dealers said.

The Dow Jones Industrial Average ended up 0.03 percent and the tech heavy Nasdaq index closed down 0.32 percent on Monday in the U.S.

Downward pressure escalated in the middle of the morning and continued to the end of the session as investors cut their holdings, in particular in the electronics sector, they said.

"With the scheduled meeting between Trump and Xi approaching, market sentiment turned cautious," Mega International Investment Services Corp. analyst Alex Huang said.

"For the moment, investors at home and abroad preferred to lock in their recent gains. They wanted to wait and see if the meeting delivers positive leads," Huang said, referring to the U.S. market doldrums and the weakness in other regional markets such as Shanghai, Hong Kong, Tokyo and Seoul.

Huang said the market was not expecting the meeting to magically resolve the two countries' trade dispute, but "if they say they will continue to talk, that will be considered progress for the moment."

The bellwether electronics sector fell victim to the current caution toward the trade issue as investors dumped TSMC, the most heavily weighted stock in the local market, after the stock went ex-dividend a day earlier, dealers said.

TSMC, which will issue an NT$8 cash dividend per share next month after going ex-dividend Monday, fell 1.04 percent to close at NT$238.00 after coming off an early high of NT$241.50, with 28.47 million shares changing hands.

Led by TSMC, the bellwether electronics sector closed down 0.95 percent to end at 423.25, off a high of 428.00, and the semiconductor sub-index closed down 1.04 percent to close at 163.95, off a high of 165.97.

TSMC's selling spread to other tech heavyweights, with iPhone assembler Hon Hai Precision Industry Co. down 0.91 percent to end at NT$76.40 and integrated circuit designer MediaTek Inc. down 1.27 percent to close at NT$311.50.

Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., closed 2.99 percent lower at NT$3,730.00.

"Non-tech stocks also generally moved lower as investors appeared reluctant to hold onto their shares and wanted to keep more cash on hand," Huang said.

Among the falling old economy stocks, Formosa Chemicals & Fibre Corp. fell 0.90 percent to close at NT$110.00, and food brand Uni-President Enterprises Corp. lost 0.24 percent to end at NT$82.00, while Formosa Plastics Corp. closed unchanged at NT$114.50.

In the financial sector, which closed down 0.05 percent, Yuanta Financial Holding Co. fell 1.06 percent to close at NT$18.70, and Shanghai Commercial & Savings Bank lost 0.70 percent to end at NT$57.10, while CTBC Financial Holding Co. rose 0.24 percent to close at NT$21.10.

"Today's fall has made the market technically weaker, and I expect the Taiex will continue to move in a narrow range, especially as U.S. markets are in consolidation mode as many investors have been unwilling to chase prices even if they rebound," Huang said.

According to the Taiex, foreign institutional investors sold a net NT$1.999 billion worth of shares Tuesday.

(By Frances Huang)