Taiwan shares end down but come off early low

Taipei-Shares in Taiwan moved lower but came off an early low Wednesday as late session buying emerged to boost select large cap stocks in the bellwether electronics sector to limit the day's losses, dealers said.

The selling reflected renewed concerns over trade tensions between the United States and China after U.S. President Donald Trump threatened overnight to raise tariffs if the two sides fail to reach an agreement to resolve their disputes, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended down 25.20 points, or 0.22 percent, at 11,631.20, after moving between 11,591.73 and 11,649.07, on turnover of NT$116.26 billion (US$3.81 billion).

The market opened down 0.09 percent in a knee-jerk reaction to the losses suffered on Wall Street, where the Dow Jones Industrial Average ended down 0.36 percent overnight in the wake of Trump's threats, dealers said.

Selling continued to push the Taiex below the 11,600 point mark before bargain hunters turned active in the late trading session, picking up tech heavyweights, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) to help the main board recoup part of the earlier losses, they said.

"Global trade issues came back to haunt market sentiment today," Ta Chan Securities Investment Consulting analyst Jerry Chen said. "Trump's remarks made many investors nervous as the global financial markets had anticipated Washington and Beijing would sign a phase one trade agreement soon."

At a Cabinet meeting, Trump said: "If we don't make a deal with China, I'll just raise the tariffs even higher." In October, both sides agreed to sign a deal but the two countries have since given mixed signals about the prospects of a trade pact.

"After a strong showing in recent sessions, investors simply seized Trump's comments as an excuse to lock in profit," Chen said. "The silver lining was that after the Taiex fell below 11,600 points, buying emerged in the late session to lift select market heavyweights."

Before Wednesday, the Taiex had gained 826.72 points or 7.63 percent since the beginning of October.

Among the stocks boosted by late session buying, TSMC, the most heavily weighted stock on the local market, fell 0.48 percent to close at NT$313.50, coming off a low of NT$312.00 after the stock hit a new high on Tuesday. Turnover totaled 22.34 million shares.

Bargain hunters also lifted stocks including those in iPhone assembler Hon Hai Precision Industry Co., which fell 0.97 percent to close at NT$91.90 after hitting a low of NT$91.20, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., dropped 1.44 percent to end at NT$4,435.00, off a low of NT$4,410.00.

"I think the buying came from foreign institutional investors who simply wanted to boost the spot market to profit in futures," Chen said. November futures contracts were settled on Wednesday.

According to the TWSE, foreign institutional investors stayed on the buy side, registering net purchases of NT$1.01 billion worth of shares on the main board Wednesday.

Chen said some other stocks in both tech and old economy sectors benefited from relatively low valuations to close above their previous closing levels and give support to the broader market throughout the session.

Among them, United Microelectronics Crop. (UMC), a smaller rival to TSMC, rose 1.37 percent to close at NT$14.75, and shares in memory chipmaker Winbond Electronics Corp. added 2.82 percent to end at NT$17.65.

In the old economy sector, Taiwan Cement Corp. rose 1.31 percent to close at NT$42.65 and Asia Cement Corp. added 2.55 percent to end at NT$46.20, while Formosa Plastics Corp. fell 0.92 percent to close at NT$96.50, and Nan Ya Plastics Corp. lost 0.70 percent to end at NT$71.40.

In line with the broader market, the financial sector fell 0.17 percent with Cathay Financial Holding Co. down 0.94 percent to close at NT$42.30, and CTBC Financial Holding Co. down 0.45 percent to end at NT$22.15.

"Global volatility is possible and the Taiex could follow, but the main board expects to see the nearest technical support at around 11,400 points," Chen said.

Source: Focus Taiwan News Channel