Taiwan shares end lower but remain above 10,300-point mark


TAIPEI, Taiwan — Shares in Taiwan ended slightly lower Friday amid caution over a possible pullback after a recent strong showing, but the weighted index still managed to close above the 10,300-point mark, dealers said.

With the broader market moving in a narrow range throughout the session, large-cap stocks such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) and contract electronics producer Hon Hai Precision Industry Co. (鴻海) were in the doldrums, making it unlikely for the entire main board to escape the weakness, the dealers said.

The weighted index on the Taiwan Stock Exchange closed down 21.36 points, or 0.21 percent, at 10,377.70, after moving between 10,374.01 and 10,422.33, on turnover of NT$90.40 billion (US$2.97 billion).

The market opened up 4.50 points and rose to the day’s high, breaching 10,400 points briefly, in the early morning session on follow-through buying from a day earlier, but selling then emerged that focused on tech heavyweights and spread to old economy and financial stocks, pushing the weighted index into negative territory, with weakness continuing to the end of the trading session, the dealers said.

“The market came off an earlier high after passing 10,400 points. Technically speaking, today’s movement showed that some investors started to feel wary of possible major corrections and preferred to pocket their money for the moment,” Ta Ching Securities analyst Andy Hsu said.

“More importantly, foreign institutional investors’ buying has been diminished, which made many local investors wonder whether foreign investors, who had served as a driver to the gains on the main board, have also turned cautious after the weighted index hit a 27-year high,” Hsu said.

The previous day, the weighted index ended at 10,399.06, the highest closing level since April 6, 1990, when the weighted index ended at 10,440.67 points.

According to the TWSE, foreign institutional investors shifted to the sell side, recording a net sale of NT$2.91 billion (US$95.72 million)-worth of shares on the main board Friday after a net buy of NT$2.87 billion the previous day.

The bellwether electronics sector was hit by cautious sentiment, down 0.24 percent, since the sector was the largest contributor to the upturn recently enjoyed by the broader market.

In the sector, TSMC, the world’s largest pure wafer foundry operator, fell 0.46 percent to close at NT$217.00 after hitting a new high of NT$218.50 in the early morning session, while Hon Hai, an assembler of iPhones and iPads, ended unchanged at NT$112.50. The two stocks are the top two in terms of market capitalization in Taiwan.

Among other tech stocks, integrated circuit designer MediaTek Inc. (聯發科) shed 2.03 percent to close at NT$265.50, while Largan Precision Co. (大立光), a smartphone camera lens supplier to Apple Inc., bucked the downturn to end up 1.53 percent at NT$4,965.00, lending some support to the broader market.

In the non-high-tech sector, Cathay Financial Holding Co. (國泰金) fell 0.61 percent to close at NT$49.00, while China Steel Corp. (中鋼), the largest steel maker in Taiwan, ended unchanged at NT$24.50, and Formosa Plastics Corp. (台塑) gained 0.55 percent to close at NT$91.50.

“Investors had better pay close attention to the fluctuation of the Taiwan dollar against the U.S. dollar down the road to determine whether foreign investors will continue to add local equities at a time of an interest rate hike cycle in the United States,” Hsu said.