Taiwan shares end lower after volatile session

09/25/2020 05:50 PM
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CNA file photo
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Taipei, Sept. 25 (CNA) Shares in Taiwan closed lower Friday after moving in a volatile session amid worries over further selling by foreign institutional investors, who continued to lock in gains they had built up in recent sessions, dealers said.

While many large-cap stocks came under pressure, the government is believed to have entered the market to pick up select bargains in the economic and financial sector to give support to the broader market, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended down 31.47 points, or 0.26 percent, at 12,232.91, after moving between 12,149.81 and 12,385.81, on turnover of NT$209.04 billion (US$7.14 billion).

The market opened up 0.40 percent and rose to the day's high in the early morning session on a technical rebound from a session earlier, when the Taiex ended down 2.54 percent in the wake of gains posted on the U.S. markets, where the Dow Jones Industrial Average bounced back 0.20 percent overnight, the dealers said.

However, with the Taiex moving closer to the 12,400-point mark, selling set in as investors pocketed their earlier profits, which pushed down the main board into negative territory before some bargain hunters became active by picking up tech heavyweight Taiwan Semiconductor Manufacturing Co. (TSMC) and large financial stocks to cap the downturn by the end of the session, they said.

"Although the Dow rebounded yesterday, the gains were not strong enough, prompting many investors to think that more volatility on the U.S. markets will continue amid lingering concerns over a lack of new stimulus measures to mitigate the economic impact of the COVID-19 pandemic," Hua Nan Securities analyst Kevin Su said.

"As long as the U.S. markets encounter more losses, foreign institutional investors are expected to cut their holdings on the local equity market, so such fears led many investors to become reluctant to chase prices and even shift to the sell side after today's initial gains," Su said.

According to the TWSE, foreign institutional investors sold a net NT$284 million-worth of shares on the main board Friday.

"The bright spot for today was that some large stocks, in particular TSMC, benefited from late-session buying," Su said. "I expect the buying came from government-led funds in a bid to cap the losses and boost investor sentiment."

TSMC, the most heavily weighted stock in the local market, rose 0.24 percent to close at NT$424.0 after fluctuating between NT$421.00 and NT$428.00. With TSMC bouncing back from its early low, the electronics sector fell 0.65 percent to close at 583.90 after hitting 579.33.

Integrated circuit packaging and testing services provider ASE Technology Holding Co. also rebounded from a low of NT$58.20 to end at NT$58.90, up 1.20 percent.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. fell 0.93 percent to close at NT$74.30 and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., shed 2.04 percent to end at NT$3,355.00 amid fears that the launch of the new iPhones will be delayed.

"Buying in the financial sector provided more evidence of support from government-led funds, as financial heavyweights have long been among the favorites of these funds, Su said.

In the financial sector, which outperformed the broader market, up 0.98 percent, Mega Financial Holding Co. rose 1.67 percent to close at NT$27.45, E. Sun Financial Holding Co. grew 1.61 percent to end at NT$25.30 and Fubon Financial Holding Co. added 0.49 percent to close at NT$40.80.

Some old economy stocks were boosted by bargain hunting, with China Steel Corp., the largest steel maker in Taiwan, up 0.75 percent to end at NT$20.15, textile maker Far Eastern New Century Corp. up 1.01 percent to close at NT$25.10, and Asia Cement Corp. up 1.49 percent to end at NT$40.80.

"How the Taiex will move will depend on how the Dow performs," Su said. "With the approaching U.S. presidential vote imposing uncertainty, investors had better stay alert over the U.S. markets' movements," Su said.

He added, however, that the Taiex could see the nearest technical support level at around 12,000 points.

(By Frances Huang)

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