Taipei, Feb. 3 (CNA) Shares in Taiwan fell more than a percent Monday amid ongoing concerns over China's ability to get its coronavirus epidemic under control, dealers said.
Selling was triggered by heavy losses on U.S. markets at the end of last week and on Chinese markets, where trading resumed Monday after a long Lunar New Year holiday.
Bargain hunters stepped in later in the session to limit the day's losses, dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 140.18 points, or 1.22 percent, at 11,354.92, after moving between 11,138.03 and 11,365.90. Turnover was NT$180.17 billion (US$5.94 billion).
The market opened down 1.12 percent after a 2 percent fall in the Dow Jones Industrial Average and a 1.8 percent fall in the S&P 500 index Friday and hit the day's low within 10 minutes of the opening.
Large cap stocks across the board came under pressure before some investors shifted to the buy side to spark a rebound and keep the Taiex above the nearest technical support at around the 120-day moving average of 11,280 points.
"Foreign institutional investors cut their short position contracts in futures on Friday, easing the anxiety of other investors and leading bargain hunters to jump into the market," Concord Securities analyst Kerry Huang said.
According to Huang, foreign institutional investors raised the number of net long position contracts from a session earlier by about 10,000 to 29,779 Friday.
Data compiled by the TWSE showed foreign institutional investors bought a net NT$1.22 billion in shares Monday after selling a net NT$35 billion in shares the previous two sessions.
Among the large cap stocks affected, Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the market, fell 1.56 percent to close at NT$315.50 after hitting a low of NT$312.00.
"Although TSMC recovered part of its earlier losses, the stock still traded below its 60-day moving average of NT$319.00, and so it has become technically weaker," Huang said.
Also in the high-tech sector, iPhone assembler Hon Hai Precision Industry Co. lost 1.20 percent to close at NT$82.20, off a low of NT$77.30, and Largan Precision Co., a supplier of camera lenses to Apple Inc., dropped 2.19 percent to end at NT$4,700.00, off a low of NT$4,550.00.
Bucking the downturn, flat panel maker AU Optronics Corp. rose 8.91 percent to close at NT$11.00, and rival Innolux Corp. gained 5.91 percent to end at NT$9.32.
They benefited from expectations that the coronavirus epidemic will prevent people from doing things outside their home and force them to stay indoors and watch TV, boosting demand for the large-sized TV panels the two companies make.
Old economy stocks, such as those in the petrochemical sector, also faced downward pressure as investors feared the spread of the epidemic would drag down global demand for crude oil, dealers said.
Among the falling petrochemical stocks, Formosa Petrochemical Corp. lost 2.67 percent to close at NT$87.50, Nan Ya Plastics Crop. fell 1.72 percent to end at NT$68.50, and Formosa Chemicals & Fibre Corp. dropped 1.30 percent to close at NT$83.80.
The financial sector appeared resilient, losing only 0.67 percent. "It seemed government-led funds lent a helping hand by buying into some financial stocks in a bid to limit the downturn on the broader market," Huang said.
In the financial sector, Mega Financial Holding Co. rose 0.16 percent to close at NT$31.60, and Yuanta Financial Holding Co. gained 0.51 percent to end at NT$19.80, while Fubon Financial Holding Co. fell 2.00 percent to close at NT$44.20.
"How the Taiex moves will depend on how much worse the coronavirus scare will get," Huang said. "The market may test the 120-day moving average again."
Source: Focus Taiwan News Channel