Taiwan shares end down after giving up early gains
Taipei, July 21 (CNA) Shares in Taiwan closed down Wednesday as investors shifted to the sell side to take advantage of the initial upturn resulting from a significant rebound on U.S. markets overnight, dealers said.
Investors rushed to lock in their profits built for select old economy stocks in the early session, while the semiconductor industry appeared resilient and even saw late session buying that prevented the broader market from falling further by the end of the session, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 69.95 points, or 0.4 percent, at 17,458.79, after moving between 17,352.24 and 17,707.56. Turnover totaled NT$613.14 billion (US$21.84 billion).
The market opened up 0.37 percent and soon rose to the day's high with buying sparked by the 1.62 percent rebound staged by the Dow Jones Industrial Average overnight in response to higher U.S. treasury yields, which eased concerns over the economic recovery, dealers said.
Selling emerged as the Taiex breached 17,700 points briefly with shipping and steel stocks in focus, while contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) attracted late session buying to support the semiconductor sector as well as the broader market, dealers added.
"Shipping stocks remained volatile during most of the trading session with major firms even plunging 10 percent, the maximum daily decline, at one point," Hua Nan Securities analyst Lu Wei-chin said. "Many investors simply pocketed their earlier gains, leaving the U.S. upturn behind."
The transportation sector, where large cap shipping stocks are traded, tumbled 7.64 percent to close at 291.46 after coming off a high of 334.23.
"The bright side was that these major shipping stocks managed to come off their lows. I think the downward pressure they face has been gradually digested," Lu said. "As global demand for marine cargo services remains strong it is possible their share prices will stabilize soon but enter consolidation mode."
In the sector, shares in Evergreen Marine Corp., the largest container cargo shipper in Taiwan, lost 8.55 percent to close at NT$155.00, off a low of NT$153.00, and rival Wan Hai Lines Ltd. dropped 8.45 percent to end at NT$238.50, off a low of NT$234.50. In addition, Yang Ming Marine Transport Corp. tumbled 10 percent to close at NT$153.50.
Among bulk cargo shippers, U-Ming Marine Transport Corp. fell 4.27 percent to end at NT$65.00, and TZE Shin International Co. lost 4.23 percent to close at NT$30.55.
Lu said the steel sector was also targeted by profit taking, falling 2.95 percent with China Steel Corp., the largest steel maker in Taiwan, down 2.64 percent to end at NT$35.10, and Chung Hung Steel Corp. down 4.27 percent to close at NT$49.30.
Elsewhere in the old economy sector, Formosa Plastics Corp. fell 1.48 percent to end at NT$100.00, and Taita Chemical Co. dropped 2.15 percent to close at NT$43.25, while food brand Uni-President Enterprises Corp. rose 0.28 percent to end at NT$72.70.
"TSMC, again, served as an anchor to the broader market as bargain hunters picked up the stock in the late session," Lu said. "After a recent slump, the stock appeared attractive as its fundamentals remain sound on the back of peak season effects in the third quarter despite the disappointing second quarter results."
After falling 5.37 percent in the previous three sessions in response to a 3.8 percent sequential fall in its second quarter earnings, TSMC, the most heavily weighted stock on the local market, rose 0.69 percent to close at NT$585.00, off an early low of NT$580.00.
Led by TSMC, the electronics sector rose 0.08 percent, with the semiconductor sub-index up 0.43 percent.
Among other semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, fell 3.05 percent to close at NT$50.80, but integrated circuit packaging and testing services provider ASE Technology Holding Co. rose 1.27 percent to end at NT$119.50.
"Several American tech giants, including Apple Inc., will report their earnings later this month, which could move U.S. markets and in turn influence foreign institutional investors' strategies in the local market," Lu said.
According to the TWSE, foreign institutional investors sold a net NT$16.23 billion worth of shares on the main board Wednesday.
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