Taiwan shares end flat; tech gains offset old economy stocks

10/22/2021 04:54 PM
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CNA file photo
CNA file photo

Taipei, Oct. 22 (CNA) Shares in Taiwan closed little changed Friday as large cap tech stocks moved higher while old economy shares lost ground.

The market faced stiff technical resistance as the Taiwan Stock Exchange's benchmark index, the Taiex, approached 17,000 points, and investors remained concerned about rising yields of U.S. Treasury bills amid mounting inflationary pressures, dealers said.

The Taiex ended down 0.77 points at 16,888.74, after moving between 16,800.49 and 16,932.89. Turnover totaled NT$281.57 billion (US$10.09 billion).

The market opened up 10.81 points and soon rose to the day's high close to 17,000 points behind the bellwether electronics sector after a 0.62 percent increase on the tech-heavy Nasdaq and a 1.12 percent increase in the Philadelphia Semiconductor Index overnight, dealers said.

Selling then followed to push the Taiex into negative territory before bargain hunters turned active to pick up tech stocks, offsetting the downturn in old economy stocks, they said.

"Ahead of the 60-day moving average of 17,068, high technical hurdles existed," Hua Nan Securities analyst Lu Chin-wei said. "It was no surprise that the Taiex faced downward pressure as it moved closer to 17,000 points today.

"Fortunately, the electronics sector remained resilient as heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) recouped early losses," Lu said.

TSMC, the most heavily weighted stock in the local market, rose 0.67 percent to close at NT$600.00. Led by TSMC, the electronics sector ended up 0.64 percent, and the semiconductor sub-index rose 0.91 percent.

Buying in TSMC spread to other semiconductor stocks. United Microelectronics Corp., a smaller contract chipmaker, closed 0.52 percent higher at NT$58.30, and IC designer MediaTek Inc. gained 1.42 percent to close at NT$926.00.

Novatek Microelectronics Corp., which supplies drive ICs for flat panels, rose 2.40 percent to end at NT$405.00.

Also in the electronics sector, PC brand Asustek Computer Inc. rose 2.01 percent to close at 356.00, while iPhone assembler Hon Hai Precision Industry Co. bucked the general tech upturn, falling 0.46 percent to end at NT$107.50.

HTC Corp., a smartphone vendor, surged 8.81 percent to close at NT$52.50 amid optimism over its efforts to develop virtual reality gadgets after it unveiled its latest portable Vive Flow immersive glasses earlier this week.

The stock rose for the seventh consecutive session.

Dealers said HTC has recently gotten a boost from the so-called "metaverse" concept talked up by Facebook CEO Mark Zuckerberg since July. It refers to a digital world where people can move between devices and communicate in a virtual environment.

"While the electronics sector continued to serve as the mainstream sector on today's market, attracting large turnover, old economy stocks largely remained in the doldrums," Lu said.

"Even though raw materials continue to gain strength from price hikes, many old economy stocks still encountered selling, indicating investors remained cautious about those stocks' directions ahead of 17,000 points," Lu said.

Despite an uptrend in international crude oil prices, the petrochemical sector fell 1.63 percent.

Formosa Plastics Corp. shed 3.08 percent to close at 110.00, and Formosa Petrochemical Corp. lost 2.33 percent to end at NT$101.50, while Formosa Chemicals & Fibre Corp. added 1.22 percent to close at NT$81.20, and Nan Ya Plastics Corp. ended up 1.01 percent at NT$88.40.

The steel sector fell 2.95 percent despite an increase in product prices with China Steel Corp., the largest steel maker in Taiwan, ending down 1.77 percent at 33.30, and Tung Ho Steel Enterprise Corp. falling 1.53 percent to close at NT$38.55.

In the transportation sector, where many shipping stocks are traded, Evergreen Marine Corp. lost 3.25 percent to close at NT$89.20, Wan Hai Lines Ltd. fell 4.09 percent to end at NT$152.50, and Yang Ming Marine Transport Corp. shed 4.70 percent to close at NT$85.10.

In addition, China Airlines fell 2.11 percent to end at NT$16.25.

"Turnover remained thin so even though buying focused on tech stocks, large caps like TSMC still saw limited upside," Lu said. "The low turnover reflected worries over an uptrend in the benchmark 10-year Treasury yield, which could lead to volatility in U.S. markets."

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$902 million worth of shares on the market Friday.

(By Frances Huang)

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