Taiwan shares edge down in consolidation mode

09/14/2021 06:38 PM
To activate the text-to-speech service, please first agree to the privacy policy below.
CNA file photo
CNA file photo

Taipei, Sept. 14 (CNA) Shares in Taiwan moved slightly lower Tuesday as investors pocketed initial gains built on the technical rebound staged by the United States markets overnight, dealers said.

However, turnover remained thin, with many investors staying on the sidelines amid fears over possible negative leads during the upcoming four-day Mid-Autumn Festival holiday, which starts on Saturday, they said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 11.41 points, or 0.07 percent, at 17,434.90, after moving between 17,424.54 and 17,529.47. Turnover totaled NT$257.23 billion (US$9.29 billion).

The market opened up 0.10 percent and rose to the day's high in the early morning session as investors took their cue from a rally on U.S. markets, where the Dow Jones Industrial Average rose 0.76 percent Monday, ending a five day losing streak, dealers said.

However, as the Taiex breached the 17,500 point mark at one point, selling emerged, focusing on large tech stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), as well as steel and shipping stocks, pushing the main board into negative territory by the end of the session, dealers added.

"Despite the initial gains, investors appeared reluctant to chase prices before the upcoming four-day long weekend," Cathay Futures Consultant analyst Tsai Ming-han said.

"With many investors turning away from the trading floor, turnover remained light, which was not favorable for tech heavyweights to sustain their earlier upturn. Do not mention any breakthrough for the moment," Tsai said.

The tech sector accounted for less than 50 percent of total turnover, paving the way for consolidation on the main board, he added.

The electronics index closed down 0.02 percent at 825.24 after coming off a high of 829.14, with the semiconductor sub-index down 0.05 percent after TSMC, the most heavily weighted stock on the local market, lost 0.33 percent to end at NT$613.00, off a high of NT$618.00.

Selling spread to other semiconductor stocks, with United Microelectronics Corp., a smaller contract chipmaker, down 1.20 percent to end at NT$66.00, and Novatek Microelectronics Corp., a supplier of drive ICs for flat panel use, losing 0.90 percent to close at NT$440.00.

Bucking the downturn, smartphone IC designer MediaTek Inc. rose 2.16 percent to end at NT$947.00, boosting its market capitalization to the second highest on the Taiex after TSMC.

Meanwhile, dynamic random access memory chip supplier Nanya Technology Corp. added 0.61 percent to close at NT$66.20.

Also in the electronics sector, shares in iPhone assembler Hon Hai Precision Industry Co. rose 0.94 percent to end at NT$107.50, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., lost 1.94 percent to close at NT$2,530.00.

"Old economy stocks, in particular in the steel and shipping industries encountered profit taking, which placed pressure on the broader market," Tsai said, referring to the retreat of many local investors who used to favor these stocks.

The transportation sector, where many shipping stocks are traded, ended down 4.14 percent.

Among the falling container cargo shippers, Evergreen Marine Corp., the largest shipping services provider in Taiwan, lost 6.44 percent to close at NT$123.50.

Yang Ming Marine Transport Corp. dropped 5.62 percent to end at NT$117.50, while Wan Hai Lines Ltd. fell 4.05 percent to close at NT$201.50. In addition, bulk cargo shipper Chinese Maritime Transport Ltd. declined 0.85 percent to end at NT$71.20.

In the steel sector, which lost 1.61 percent, China Steel Corp., Taiwan's largest steel maker, fell 0.50 percent to close at NT$39.85, Ta Chen Stainless Pipe Co. lost 2.38 percent to end at NT$49.30, and China Steel Structure Corp. shed 7.49 percent to close at NT$71.60.

Tung Ho Steel Enterprise Corp. rose 0.11 percent to end at NT$43.80.

Elsewhere in the old economy sector, Formosa Plastics Corp. rose 1.49 percent to close at NT$102.00, and textile brand Far Eastern New Century Corp. gained 1.02 percent to end at NT$29.75, while paper product supplier YFY Inc. lost 2.70 percent to close at NT$34.25.

"I expect trading will continue to be quiet before the holiday with the Taiex perhaps moving around the 60-day moving average of 17,411 points," Tsai said.

"Since foreign institutional investors are largely standing on the buy side, it is unlikely the main board will suffer a major pullback after the holiday ends," Tsai added.

Despite the fall of the Taiex, foreign institutional investors bought a net NT$6.54 billion worth of shares on the main board Tuesday, according to the TWSE.

(By Chang Chien-chung and Frances Huang)

Enditem/AW

    0:00
    /
    0:00
    We value your privacy.
    Focus Taiwan (CNA) uses tracking technologies to provide better reading experiences, but it also respects readers' privacy. Click here to find out more about Focus Taiwan's privacy policy. When you close this window, it means you agree with this policy.