Taiwan shares end up slightly on geopolitical tension, COVID-19 fears

TAIPEI (CNA) — Shares in Taiwan closed slightly higher in last-ditch buying Wednesday as market sentiment was haunted by rising tension on the Korean peninsula and concerns over a resurgence of COVID-19 infections, dealers said.

While many investors stepped back from the bellwether electronics sector, buying rotated to the financial sector as well as select old economy stocks, which helped the broader market recoup its earlier losses, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, closed up 22.95 points, or 0.2 percent, at 11,534.59, after moving between 11,482.32 and 11,550.32, on turnover of NT$174.08 billion (US$5.87 billion).

The market opened up 0.12 percent and rose to the day’s high in the early morning session on follow-through buying from a session earlier, when the Taiex ended up 1.82 percent.

However, the main board soon headed south as investors took cues from losses posted by U.S. Dow Jones futures in the wake of geopolitical tensions after a move by North Korea to destroy a liaison office with South Korea and a spike in confirmed COVID-19 cases in Beijing, the dealers said.

With the Taiex falling below 11,500 points, buying re-emerged, in particular in the late-trading session, as investors rushed to pick up financial and old economy stocks to offset the impact of selling in tech stocks, vaulting the main board back into positive territory, they said.

“The local equity market still benefited from ample liquidity, which led buying to rotate to the financial and old economy sectors today as the tech sector suffered a pause,” Ta Chan Securities analyst Jerry Chen said.

“However, turnover remained moderate, as many investors preferred to stay on the sidelines, closely watching how the political situation on the Korean peninsula will evolve and whether Beijing will contain the COVID-19 spread,” Chen said.

In the financial sector, which rose 0.53 percent, serving as a driver to the gains on the broader market, CTBC Financial Holding Co. rose 0.98 percent to close at NT$20.55, Cathay Financial Holding Co. gained 0.72 percent to end at NT$42.20, and Fubon Financial Holding Co. added 0.45 percent to close at NT$44.30.

Among the old economy stocks that were boosted by late-session buying, China Steel Corp., the largest steel maker in Taiwan, rose 0.72 percent to close at NT$20.95, and Formosa Petrochemical Corp., which went ex-dividend that day, gained 1.48 percent to end at NT$89.20.

Amid COVID-19 fears, buying also rotated to biotech stocks, with Panion & BF Biotech Inc. and China Chemical & Pharmaceutical Co. up 10 percent, the maximum daily increase, to close at NT$137.50 and NT$24.20, respectively.

“Today, the electronics sector appeared stagnant,” Chen said. “Unless buying in large stocks accelerates, it will not be easy for the main board to climb out of a small trade range.”

Among the tech heavyweights, contract chipmaker Taiwan Semiconductor Manufacturing Co., the most heavily weighted stock in the local market, closed unchanged at NT$315.00, while iPhone assembler Hon Hai Precision Industry Co. fell 0.26 percent to end at NT$78.20, and smartphone camera lens supplier Largan Precision Co. shed 0.83 percent to close at NT$4,160.00.

According to the TWSE, foreign institutional investors bought a net NT$3.80 billion-worth of shares on the main board Wednesday.