Taiwan shares edge lower after recouping most of early losses

Taipei, March 19 (CNA) Shares in Taiwan closed slightly lower Tuesday but recouped most of earlier losses after the main board saw technical support ahead of the five-day moving average of around 19,794 points.

After coming off the day's low, the main board moved in consolidation for most of the session as market sentiment turned cautious with investors waiting for the conclusion of the two-day policymaking meeting scheduled by the U.S. Federal Reserve to open Tuesday (U.S. time).

The Taiex, a weighted index on the Taiwan Stock Exchange, ended down 22.65 points, or 0.11 percent, at 19,857.20 after moving between 19,762.16 and 19,921,25. Turnover totaled NT$463.46 billion (US$16.44 billion).

The market opened down 0.41 percent and soon fell to the day's low, down about 117 points, as large-cap electronics tech stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), came under heavier pressure.

The main board, however, attracted bargain hunters starting from the mid-morning session, helping tech heavyweights leave their earlier losses behind, while strong buying into the constituents of a new Exchange Traded Fund (ETF) raised by Yuanta Securities also gave a boost to the index by the end of the session.

"The five-day moving average did provide strong support to the local main board, with TSMC recovering from its low," Concord Securities analyst Kerry Huang said.

TSMC, the local market's heavily weighted stock, lost 0.26 percent to close at NT$762.00 after hitting a low of NT$755.00.

Due to a recovery of TSMC, the bellwether electronics index ended down only 0.07 percent at 1,041.29, off a low of 1,033.86.

"In addition to technical factors, Taiex also benefited from growing enthusiasm in trading EFTs," Huang said. "The new Yuanta high dividend ETF (coded 00940) prompted investors to buy into its constituents."

An ETF, which operates like a mutual fund, serves as a type of pooled investment security and typically tracks a particular index, sector, commodity, or other asset.

United Microelectronics Corp. (UMC), a smaller contract chipmaker, which is one of the top 10 constituents of the Yuanta Securities' new ETF, scheduled to be listed next month, rose 2.32 percent to end at NT$53.00.

Meanwhile, clean room equipment supplier United Integrated Services Co., another leading constituent of the Yuanta ETF, soared 10 percent, the maximum daily increase, to close at NT$414.00.

Also in the tech sector, smartphone IC designer MediaTek Inc. lost 1.71 percent to end at NT$1,150.00, while IC packaging and testing services provider ASE Technology Holding Co. rose 1.27 percent to close at NT$160.00.

In addition, power management solution provider Delta Electronics Inc. rose 4.58 percent to close at NT$320.00 as media reported the company is expected to secure orders from American chip designer Nvidia Corp., while iPhone assembler Hon Hai Precision Industry Co. ended unchanged at NT$136.00.

"In the old economy sector, Evergreen Marine Corp. moved higher sharply as the stock is also one of the top 10 constituents of the Yuanta ETF, and a high-flying Evergreen Marine helped to push up the transportation index today," Huang said.

With the transportation index rising 2.36 percent, Evergreen Marin, the largest container cargo shipper in Taiwan, surged 7.60 percent to close at NT$177.00, and Yang Ming Marine Transport Corp., another major container cargo shipper, rose 0.33 percent to end at NT$45.30.

Buying spread to bulk cargo shipping stocks with Sincere Navigation Corp. rising 4.05 percent to close at NT$25.70, and U-Ming Transport Corp. growing 3.90 percent to end at NT$56.00.

Select electric machinery stocks got a boost from news that they have secured large orders from U.S. clients, Huang said, referring to Shihlin Electric & Engineering Corp., which rose 5.99 percent to close at NT$237.00, and Teco Electric & Machinery Co., which gained 4.17 percent to end at NT$55.00.

Elsewhere in the old sector, Taiwan Cement Corp. lost 0.95 percent to close at NT$31.40, and Asia Cement Corp. ended down 1.34 percent at NT$40.55. Meanwhile, Formosa Plastics Corp. dropped 0.88 percent to close at NT$67.80, while Nan Ya Plastics Corp. ended unchanged at NT$55.00.

In the financial sector, which lost 0.17 percent, Mega Financial Holding Co. fell 0.99 percent to close at NT$40.20, while Fubon Financial Holding Co. rose 0.42 percent to end at NT$69.80.

"Before the Fed concludes, the Taiex is expected to trade in consolidation," Huang said. "Investors at home and abroad appear anxious about the American central bank's comments for a better guess of a possible rate cut cycle."

According to the TWSE, foreign institutional investors bought a net NT$5.03 billion worth of shares on the main board Tuesday.