Shares in Taiwan closed lower Monday, hurt by disappointing job data released in the United States on Friday that raised concerns over the global economic recovery, dealers said.
The bellwether electronics sector appeared resilient, however, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.
The Taiex, the benchmark index on the Taiwan Stock Exchange (TWSE), ended down 21.62 points, or 0.12 percent, at 17,495.30, after moving between 17,461.07 and 17,633.67. Turnover totaled NT$373.28 billion (US$13.53 billion).
The market opened up 0.10 percent on follow-through buying from a session earlier, when the Taiex rose 1.14 percent, and buying continued to push the index close to 17,650 points before selling set in late in the session to drag the Taiex down, dealers said.
"Technical resistance ahead of 17,650 points remained stiff," Mega International Investment Services Corp. analyst Alex Huang said.
"So investors used the ugly job data in the United States as an excuse to pocket gains amid worries over the impact of the spread of the Delta variant."
On Friday, the U.S. reported non-farm payrolls increased by 235,000 in August, far below the 720,000 estimated by the market, leading to a 0.21 percent decline in the Dow Jones Industrial Average.
The tech-heavy Nasdaq index was not as affected, gaining 0.21 percent.
"So large cap TSMC showed resilience," Huang said. "The chipmaker continued to ride the wave of a recent product price hike and serve as an anchor for the broader market."
TSMC, the most heavily weighted stock on the market, rose 1.77 percent to close at NT$631.00, after hitting a high of NT$638.00, after foreign brokerages increased their target price for the stock.
Led by TSMC, the electronics sector rose 0.31 percent, and the semiconductor sub-index gained 0.77 percent.
"The market is expecting that TSMC will raise its product prices again next year due to a lingering global supply shortage," Huang said.
Many other semiconductor heavyweights fell, however, as investors locked in earlier gains amid fears that the Taiex would face a major pullback ahead of 17,650 points, Huang said.
Among them, United Microelectronics Corp. (UMC), a smaller contract chipmaker, lost 0.14 percent to end at NT$69.90 after hitting a high of NT$72.00.
UMC announced on Friday that it was setting up a partnership through a share swap with integrated circuit packaging and testing services provider Chipbond Technology Corp.
After the deal is completed, UMC will take a 9.09 percent stake in Chipbond, while Chipbond will take a 0.62 percent in UMC.
On the over-the-counter market, Chipbond shares also fell 3.82 percent on profit taking Monday to close at NT$78.00.
Novatek Microelectronics Corp., a supplier of drive ICs for flat panel use, plunged 5.81 percent to end at NT$430.00 in the wake of a fall in TV screen prices.
That price fall also hurt flat panel suppliers. AU Optronics Corp. closed down 1.74 percent at NT$16.95, and Innolux Corp. fell 1.50 percent to end at NT$16.40.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 1.33 percent to close at NT$111.00 before it released its August sales report due after the market's close.
"Concerns over the global economy took a toll on many raw material stocks today. But the steel sector outperformed the broader market as many major economies, including the U.S., are expected to launch massive infrastructure projects," Huang said.
In the steel sector, which rose 1.83 percent, China Steel Corp., the largest steel maker in Taiwan, rose 3.74 percent to close at NT$38.85, and Yieh Hsing Enterprise Co. gained 1.66 percent to end at NT$30.70.
Elsewhere in the old economy sector, Formosa Plastics Corp. fell 1.19 percent to close at NT$99.30, and Shinking Synthetic Fibers Corp. lost 2.30 percent to end at NT$19.15.
"Investors should watch for the sales reports of listed companies for August, which could dictate their share movements," Huang said. TSMC is set to report its sales on Friday.
According to the TWSE, foreign institutional investors bought a net NT$9.60 billion in shares on Monday.
Source: Focus Taiwan News Channel