Taipei, Shares in Taiwan closed lower Monday as investors pocketed earlier gains pushing the main board into negative territory amid lingering concerns over volatility on Wall Street, dealers said.
The steel sector faced heavy downward pressure as investors dumped steel stocks after U.S. President Donald Trump announced last week that his administration will impose tariffs on imported steel and aluminum this week at the earliest.
The weighted index on the Taiwan Stock Exchange or the Taiex ended down 55.27 points, or 0.52 percent, at the day's low of 10,642.90, coming off an early high of 10,756.37, on turnover of NT$111.98 billion (US$3.82 billion).
The market opened up 0.27 percent and rose to the day's high in the early morning session with buying sparked by moves on the Dow Jones Industrial Average to recoup most of its losses on Friday, dealers said.
As the Taiex breached 10,700 points to move closer to the 10,800 point mark, selling re-emerged as investors rushed to take profits by dumping select large cap stocks, while contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) remained resilient preventing the broader market from falling further, they said.
"Although the Dow recovered most of its earlier losses on Friday, many investors remained concerned about more volatility on the U.S. market, which will dictate the movement of foreign funds," Taishin Securities Investment Advisory analyst Tony Huang said.
After NT$20.28 billion in net sales last week, foreign institutional investors registered additional net sales of NT$10.21 billion worth of shares on the main board Monday.
"Faced with strong technical resistance ahead of 10,800 points, investors preferred to take money and run for the moment, putting the equity market in consolidation mode," Huang said.
In the bellwether electronics sector, which closed down 0.30 percent, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., shed 4.39 percent to end at NT$3,700.00, and shares in iPhone assembler Hon Hai Precision Industry Co. lost 0.91 percent to close at NT$87.00.
"Fortunately, heavyweight TSMC traded above the previous closing level throughout the Monday session, or the main board would have seen more losses," Huang said.
TSMC, the most heavily weighted stock on the local market, gained 0.63 percent to close at NT$241.50 with 27.31 million shares changing hands, although the stock came off an early low of NT$243.00.
The steel sector shed 2.03 percent on Trump's plan to impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. White House trade adviser Peter Navarro told U.S. media on Sunday that the president has no plan to exempt any countries from the new tariffs.
Among falling steel stocks, Chung Hung Steel Corp. shed 10 percent, the maximum daily movement, to close at NT$12.20, and Sheng Yu Steel Co. lost 3.38 percent to end at NT$27.15 because the U.S. is their main market for flat steel.
Shares in China Steel Corp., the largest steel maker in Taiwan, also fell 1.46 percent to close at NT$23.60, and Tung Ho Steel Enterprise Corp. dropped 2.60 percent to end at NT$24.35.
In the old economy sector, shares in Nan Ya Plastics Corp. gained 0.26 percent to close at NT$78.10 after hitting a high of NT$79.00, while Formosa Chemicals & Fibre Corp. ended unchanged at NT$105.00, off a high of NT$106.50.
Huang said he expects the main board to move between 10,500 and 10,800 points in the short term.
Source: Focus Taiwan News Channel