Shares in Taiwan moved lower Friday amid selling sparked by renewed concerns over COVID-19 after the country reported the first domestically transmitted case in more than a month the previous day.
A plunge in tech stocks on the U.S. markets overnight also made many investors cautious, causing a rush to dump large electronics stocks, which pushed down the broader market, according to dealers, with buying rotating to the biotech industry to take advantage of Thursday's domestic case.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 87.86 points, or 0.49 percent, at 17,826.26, after moving between 17,767.80 and 17,893.29. Turnover totaled NT$284.39 billion (US$10.26 billion).
The market opened down 0.12 percent, and selling increased to send semiconductor stocks lower as investors took cues from a 1.71 percent decline on the tech-heavy Nasdaq index and 2.14 percent plunge on the Philadelphia Semiconductor Index overnight.
Market sentiment was hurt by the newly reported domestic COVID-19 case, which involved a woman in her 20s who worked until early December in a laboratory at the Genomics Research Center at Academia Sinica and had likely been infected with the Delta variant at her workplace in Taipei's Nangang District.
With the Taiex falling below the nearest technical support at around the five-day moving average of 17,811 points, however, some bargain hunters jumped into the market, helping the main board recoup part of its earlier losses by the end of the session, dealers said.
"The new domestic COVID-19 struck the nerves of many investors as they feared that the situation will get worse to prompt the government to raise its alert by restricting people movement, which could hurt consumption," Hua Nan Securities analyst Kevin Su said.
As of Friday morning, 123 of the 138 contacts of the female patient in Taipei and New Taipei, where she work and lives, tested negative for the disease, with the results of the remaining 15 tests still pending.
"The heavy losses suffered by tech stocks on the U.S. markets overnight also added selling to the local main board with semiconductor heavyweights in focus," Su said. "Fortunately, as the market remained awash in liquidity, some investors were still willing to hunt bargains to cap the downturn."
The electronics index lost 0.44 percent to end at 851.84 after coming off a low of 847.59, with the semiconductor sub-index down 0.59 percent.
Among the large semiconductor stocks under downward pressure, Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market and the world's largest contract chipmaker, dropped 0.49 percent to close at NT$605.00 after hitting NT$602.00.
In addition, United Microelectronics Corp., a smaller contract chipmaker, lost 0.78 percent to end at NT$63.50 but came off a low of NT$67.20 after a U.S.-based brokerage downgraded its recommendation on the stock and two other contract chipmakers.
Bucking the downward trend, the other two contract chipmakers downgraded by the U.S.-based brokerage -- Powerchip Semiconductor Manufacturing Corp. on the main board and Vanguard International Semiconductor Corp. on the over-the-counter (OTC) market -- rose 2.39 percent and stay unchanged, respectively, to close at NT$72.70 and NT$153.50. Powerchip launched an initial public offering on Monday.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. ended unchanged at NT$105.00, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.23 percent to close at NT$2,055.00.
"COVID-19 fears cut both ways today as buying rotated to select biotech stocks throughout the session," Su said. The biotech sector ended up 0.79 percent.
Among them, face mask supplier Universal Inc. rose 3.86 percent to close at NT$45.70, vaccine developer Adimmune Corp. added 0.91 percent to end at NT$44.45, and Sinphar Pharmaceutical Co. gained 0.69 percent to close at NT$29.05. In addition, Medigen Vaccine Biologics Corp. rose 1.79 percent to end at NT$285.00 on the OTC market.
Elsewhere, the transportation sector saw selling as investors locked in their gains built in the previous few sessions, ending down 2.13 percent.
In the sector, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, lost 4.11 percent to close at NT$140.00. Rival Yang Ming Marine Transport Corp. fell 3.50 percent to end at NT$124.00, while Wan Hai Lines Ltd. rose 1.20 percent to close at NT$210.00.
"I expect the fall for the shipping industry will be short-lived as freight rates remain high on a supply shortage caused by worsening port congestion worldwide," Su said.
Judging the latest market movement, Su said, the Taiex has found its short-term support at around 17,800 points for now, but technical hurdles ahead of 18,000 points are expected to stay high.
According to the TWSE, foreign institutional investors sold a net NT$3.27 billion worth of shares on the main board Friday.
Source: Focus Taiwan News Channel