Taiwan shares end down on mild technical correction
Taipei, Jan. 8 (CNA) Shares in Taiwan moved lower Tuesday on a mild correction from the previous a session as they neared the technical resistance point of 9,600, dealers said.
The bellwether electronics sector came under pressure, led by major suppliers to Apple Inc., after shares of American consumer electronics manufacturers fell in the U.S. Monday, dealers said.
The market was propped up to some extent, however, by buying in petrochemical stocks following an increase in international crude oil prices, dealers said.
The weighted index on the Taiwan Stock Exchange (Taiex) closed down 26.70 points, or 0.28 percent, at 9,563.60, after moving between 9,547.63 and 9,600.94. Turnover during the session was NT$77.16 billion (US$2.5 billion).
The market opened up 1.26 points and soon rose to the day's high on follow-through buying from the previous session, when the Taiex soared 2.21 percent.
As the index breached 9,600 points, however, selling emerged Tuesday, focusing on "Apple concept stocks" in the wake of a 0.22 percent fall in Apple shares on Wall Street the day before, dealers said.
By the end of the session, rotational buying in petrochemical stocks, in particular in the conglomerate Formosa Plastics Group (FPG), helped cushion the broader market against the impact of the sliding electronics sector, dealers said.
"Technical resistance ahead of 9,600 points was strong so many investors preferred to lock in their gains by cutting their holdings in tech stocks," Mega International Investment Services Corp. analyst Alex Huang said.
"Today's low turnover also reflected such caution and a quiet trading session," he said.
Huang said "Apple concept stocks" were the targets of the selling amid concerns over their business outlook as demand for high-end smartphones has been on the decline.
Catcher Technology Co., a metal casing supplier to Apple, shed 2.60 percent to close at NT$206.00 after the company reported a 30.4 percent monthly drop in sales for December 2018 and gave a cautious outlook for 2019.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which supplies iPhone processors, lost 0.94 percent to end at NT$211.00, and iPhone assembler Hon Hai Precision Industry Co. dropped 1.01 percent to close at NT$68.60.
Bucking the downturn on the broader market, Largan Precision Co., a smartphone camera lens supplier to Apple, gained 1.29 percent to end at NT$3,145.00.
Meanwhile, the petrochemical sector closed up 0.91 percent amid reports that Saudi Arabia is planning to further reduce oil exports, which boosted crude oil prices overnight.
Among the gaining petrochemical stocks, the FPG's flagship entity Formosa Plastics Corp. rose 2.51 percent to close at NT$201.00, and Formosa Chemicals & Fibre Corp. climbed 2.39 percent to end at NT$107.00.
In the financial sector, stocks moved lower in line with the broader market, dropping 0.41 percent, with Fubon Financial Holding Co. falling 0.54 percent to close at NT$45.70, and Cathay Financial Holding Co. falling NT$0.11 percent to end at NT$45.15.
"I expect the main board will remain in consolidation, particularly as Taiwan has entered the earnings season," Huang said, referring to the scheduled release of Largan and TSMC's fourth-quarter results on Thursday and next week, respectively.
According to Taiex data, foreign institutional investors sold a net NT$954 million worth of shares on the main board Tuesday.
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