Taiwan shares end down on low turnover; non-tech stocks offset losses

09/13/2021 05:43 PM
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Taipei, Sept. 13 (CNA) Shares in Taiwan closed lower Monday with market sentiment hit by volatility on the United States markets at the end of last week, keeping turnover at a low level, dealers said.

The bellwether electronics sector came under pressure in the wake of losses suffered by tech stocks on the U.S. markets, but financial and old economy stocks largely bucked the downturn, helping the main board remain above the 60-day moving average of 17,405 points at the end of trading, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 28.26 points, or 0.16 percent, at 17,446.31, after moving between 17,387.57 and 17,482.57. Turnover totaled NT$252.695 billion (US$9.12 billion).

The market opened down 0.13 percent and soon fell to the day's low in the early morning session after the losses in the U.S. where the Dow Jones Industrial Average fell 0.78 percent Friday, dealers said.

The electronics sector faced downward pressure throughout the session led by a 0.87 percent fall on the tech-heavy Nasdaq index Friday, but the financial and old economy sectors attracted rotational buying to offset the losses incurred by large cap stocks including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers added.

"Despite the Taiex recouping part of its earlier losses, turnover remained thin today, indicating the main board has fallen into consolidation mode," MasterLink Securities analyst Tom Tang said.

Monday's turnover was the second lowest this year, beaten only by NT$246.91 billion on Sept 9.

"The low turnover showed many investors remain reluctant to hunt bargains and stayed away from the trading floor at a time when financial authorities have tightened their monitoring of big swings in share prices," Tang said.

"In addition, fears over further volatility on U.S. markets have caused many local investors to stay on the sidelines," Tang added.

The electronics sector largely remained in the doldrums Monday, down 0.95 percent with the semiconductor sub-index down 1.21 percent, Tang said.

"TSMC, in the upstream segment in the semiconductor industry, led the downturn," Tang said. "Although the chipmaker hiked its product prices, the market has growing fears that the price hikes will increase the burden on semiconductor suppliers in the downstream segment."

TSMC, the most heavily weighted stock on the local market, fell 1.13 percent to close at NT$615.00.

Selling also spread to other semiconductor stocks with United Microelectronics Corp., a smaller contract chipmaker, down 2.05 percent to end at NT$66.80.

Shares in integrated circuit packaging and testing service provider ASE Technology Holding Co. were also down 3.12 percent to close at NT$124.00, but IC designer MediaTek Inc. rose 0.22 percent to end at NT$927.00.

The local market remains awash in liquidity so rotational buying appeared active among many non-tech stocks, Tang said.

"Today, financial heavyweights received a boost from their improving bottom lines, serving as one of the pillars to stabilize the broader market," he added.

In the financial sector, which rose 1.18 percent, shares in Fubon Financial Holding Co., which ranked as the most profitable among the 15 listed financial holding firms in Taiwan, rose 4.90 percent to close at NT$81.40 after the bank raked in NT$122.35 billion in net profit in the first eight months of this year, up 91 percent from a year earlier.

Cathay Financial Holding Co. was in second place, posting NT$114 billion in net profit in the first eight months of this year, up 91 percent from a year earlier. Its shares rose 1.18 percent to end at NT$59.90 Monday.

"Another bright side for Monday's market was that many raw material stocks also moved higher, further dampening the impact of tech losses," Tang said.

In the steel sector, which rode the wave of higher product prices and rose 2.64 percent, China Steel Corp., the largest steel maker in Taiwan, gained 2.43 percent to close at NT$40.05, and Tung Ho Steel Enterprise Corp. grew 3.55 percent to end at NT$43.75.

In addition, China Steel Structure Corp. soared 10 percent, the maximum daily increase, to close at NT$77.40.

Among other gaining old economy stocks, polyethylene resins provider USI Corp. rose 2.72 percent to end at NT$34.00, Asia Polymer Corp. grew 1.99 percent to close at NT$38.35, and Formosa Plastics Corp. added 1.31 percent to end at NT$100.50.

"Since Taiwan will have a long weekend (Sept. 18-21) to celebrate the Mid-Autumn Festival, I expect turnover to remain light for the rest of the week as more investors take to the sidelines amid fears of further U.S. volatility during the break," Tang said.

According to the TWSE, foreign institutional investors sold a net NT$3.28 billion worth of shares on the main board Monday.

(By Jeffrey Wu and Frances Huang)

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