Taiwan shares close higher despite losses on U.S. markets
Taipei, Dec. 3 (CNA) Shares in Taiwan closed slightly higher Tuesday, although the U.S. markets incurred heavy losses overnight amid renewed concerns over the trade frictions between the United States and China, dealers said.
On the local main board, late session buying of select large cap stocks in the electronics and non-tech sectors helped the market recoup its early losses and close in positive territory, dealers said.
The weighted index on the Taiwan Stock Exchange (Taiex) closed up 28.75 points, or 0.25 percent, at the day's high of 11,531.58, off an early low of 11,460.06. Turnover totaled NT$107.36 billion (US$3.52 billion) during the session.
The market opened down 0.26 percent and fell further as investors took cues from a plunge on the U.S. markets Monday, when the Dow Jones Industrial Average closed down 0.96 percent and the tech-heavy Nasdaq index ended 1.12 percent lower after China hit back at the U.S. over a bill signed by President Donald Trump in support of the Hong Kong protesters, dealers said.
China said it was suspending visits to Hong Kong by American warships and imposing sanctions on several U.S. nongovernmental groups.
The drop on the U.S. markets also reflected a decline in manufacturing activity in the U.S. in November, dealers said.
In Taiwan, as the Taiex fell close to the nearest technical support at around 11,400 points, bargain hunters began picking up market heavyweights across the board, including iPhone assembler Hon Hai Precision Industry Co., and the buying intensified late in the trading session, dealers said.
"The Taiwan market fell at the end of last week after Trump signed the legislation on Hong Kong, and that was already factored in here," Mega International Investment Services Corp. analyst Alex Huang said. "Due to the Thanksgiving holiday in the U.S., however, the markets there did not start to digest the news until Monday."
Furthermore, he said, many investors in Taiwan are of the opinion that China's retaliatory measures are only symbolic.
"They are still hoping that Washington and Beijing will eventually sign a phase-one trade deal," Huang said.
As a result, he said, bargain hunting emerged Tuesday after the Taiex fell below the 11,500-point mark and moved closer to the nearest technical support at around 11,400 points.
"Looking at the recovery of Hon Hai and other large cap stocks, it seemed that many investors were willing to buy on optimism toward a trade deal between the U.S. and China," Huang said.
Hon Hai, the world's largest contract electronics maker, rose 1.58 percent to close at NT$90.00, after hitting a low of NT$87.80, with 33.36 million shares changing hands.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) came off an early low of NT$305.00 to end 0.16 percent lower at NT$307.00. TSMC and Hon Hai are the two largest cap stocks in Taiwan.
Memory chipmakers also attracted buying as product prices showed signs of stabilizing, with Nanya Technology Corp. gaining 2.37 percent to close at NT$73.30, off a low of NT$71.10, and Winbond Electronics Corp. ending 2.91 percent higher at NT$17.70, off a low of NT$17.00.
Also in the electronics sector, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., dropped 1.00 percent to close at NT$4,470.00, after hitting a low of NT$4,460.00.
Meanwhile, late session buying in some old economy heavyweights helped boost the broader market, dealers said.
Taiwan Cement Corp. rose 1.21 percent to end at NT$41.85, Asia Cement Corp. gained 2.00 percent to close at NT$46.00, and China Steel Corp., the largest steel maker in Taiwan, finished 0.64 percent higher at NT$23.55.
In the financial sector, which closed up 0.09 percent, Fubon Financial Holding Co. rose 0.22 percent to end at NT$44.90, and Cathay Financial Holding Co. added 0.64 percent to close at NT$41.75.
"With many foreign institutional investors away from the trading floor and many more expected to leave for the Christmas holidays, turnover is likely to remain light and no breakthrough of the Taiex is anticipated in the short term," Huang said.
According to Taiex data, foreign institutional investors bought a net NT$4.57 billion worth of shares on the main board Tuesday.
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