Taipei, Nov. 8 (CNA) Shares in Taiwan moved lower and closed below the 11,600-point mark Friday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) dragged the bellwether electronics sector down, dealers said.
Investor sentiment turned cautious over a possible technical pullback in the market after recent solid gains and general anxiety before the United States and China reach an interim trade deal, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 27.02 points, or 0.23 percent, at 11,579.54, after moving between 11,561.31 and 11,642.41. Turnover was NT$134.33 billion (US$4.42 billion).
The market opened up 0.12 percent and quickly hit the day's high after markets in the U.S. finished in positive territory overnight. The Dow Jones Industrial Average closed up 0.66 percent and the tech-heavy Nasdaq ended up 0.28, dealers said.
Selling soon set in, however, and the Taiex remained in negative territory for the rest of the session, hurt by TSMC's losses and wariness on trade issues.
"There is conflicting information emerging about trade talks between the U.S. and China. So before a deal is signed and sealed, the market will be concerned over uncertainty over global trade," Hua Nan Securities analyst Kevin Su said.
China's Commerce Ministry said Beijing and Washington have agreed to simultaneously cancel some existing tariffs on one another's goods.
Reuters reported, however, that while a U.S. official also said the two sides agreed to the tariff rollback, there has been fierce internal opposition inside the White House.
"After a recent strong showing in the Taiex, many investors preferred to take a break for the time being amid fears that possible negative leads from the global trade issue will affect financial markets worldwide," Su said.
Before Friday's retreat, the Taiex had gained 823.39 points, or about 7.6 percent, since the beginning of October, largely led by TSMC, the most heavily weighted stock in Taiwan's market.
"Today, investors simply pocketed the gains TSMC had posted in recent sessions," Su said. "There is nothing wrong with TSMC's fundamentals, so the losses were only technical in nature."
TSMC, considered to be the sole supplier of processors for the newest iPhones, fell 1.13 percent to close at NT$305.50.
Hurt by TSMC's fall, the electronics sector ended down 0.30 percent and the semiconductor sub-index ended down 1.11 percent.
The silver lining, Su said, was that other major Apple concept stocks moved higher to offset TSMC's downturn.
Largan, which supplies smartphone camera lenses to Apple, rose 2.04 percent to end at NT$4,760.00, and metal casing maker Catcher Technology Co. closed 1.45 percent higher at NT$279.00.
Hon Hai Precision Industry Co., the biggest assembler of iPhones, rose 0.11 percent to end at NT$90.90.
Pegatron Corp., a smaller iPhone assembler, soared 10 percent, the maximum daily increase, to close at NT$67.30 after the company reported on Thursday that its net profit for the third quarter rose 81.7 percent from a quarter earlier.
"Buying in select financial stocks on relatively low valuations also prevented the broader market from falling further today," Su said.
In the financial sector, SinoPac Financial Holding Co. added 0.79 percent to end at NT$12.70, CTBC Financial Holding Co. rose 0.69 percent to close at NT$21.85, and Fubon Financial Holding Co. closed 0.22 percent higher at NT$45.60.
Among the mixed old economy stocks, food brand Uni-President Enterprises Corp. fell 1.88 percent to close at NT$73.00, Formosa Plastics Corp. fell 0.81 percent to end at NT$97.40, and Eclat Textile Co. rose 0.51 percent to close at NT$392.50.
"The market remained awash in liquidity so I expect the Taiex will see technical support at around 11,400 points if another retreat occurs," Su said.
"But we still have to watch closely to see whether foreign institutional investors will continue to be net buyers of shares and how much they are investing."
According to the TWSE, foreign institutional investors bought a net NT$1.50 billion in shares Friday, after a net buy of NT$4.98 billion in shares on Thursday.