Shares in Taiwan closed slightly lower Monday as strong buying of shipping stocks helped the broader market recover most of its earlier losses on the back of a spike in freight rates, dealers said.
However, the bellwether electronics sector remained in the doldrums, led by large semiconductor stocks, in the wake of heavy losses suffered by tech stocks on U.S. markets at the end of last week, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 8.93 points, or 0.05 percent, at 17,688.21, after moving between 17,585.95 and 17,763.42. Turnover totaled NT$295.33 billion (US$10.65 billion).
The market opened down 0.26 percent and soon dipped to the day's low, falling about 110 points led by large semiconductor stocks in focus, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), after a 1.92 percent fall on the Nasdaq index Friday, dealers said.
After the Taiex breached the 17,600 point mark, bargain hunters turned active to pick up shipping heavyweights, pushing up the transportation sector and limiting the impact from a weak electronics sector by the end of the session, dealers added.
The transportation sector rose 4.56 percent, while the electronics sector fell 0.53 percent with the semiconductor sub-index down 0.92 percent.
"Looking at the heavy turnover of the top three shipping stocks. Interest in the shipping industry appeared very strong," Concord Securities analyst Kerry Huang said. "Along with rising share prices, the large turnover allowed shipping stocks to serve as an anchor stabilizing the broader market despite the losses suffered by tech heavyweights."
"Amid rising concerns over the Omicron variant, port congestion worldwide could get worse and the shipping industry could benefit from a continued spike in freight rates," Huang said.
According to the TWSE, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, and rival Yang Ming Marine Transport Corp. took the first and second spot, respectively, in Monday turnover at NT$33.81 billion and NT$15.66 billion respectively.
TSMC turnover was the third highest at NT$14.35 billion, ahead of United Microelectronics Corp., a smaller contract chipmaker, which generated NT$12.71 billion in turnover.
Boosted by investor enthusiasm, shares in Evergreen Marine soared 5.62 percent to close at NT$141.00, while Yang Ming Marine Transport rose 3.72 percent to end at NT$125.50, and Wan Hai Lines Ltd. surged 7.29 percent to close at NT$176.00. In addition, bulk cargo shipper Sincere Navigation Corp. rose 4.34 percent to end at NT$30.05.
Airlines stocks also moved sharply higher, with China Airlines up 2.91 percent to close at NT$26.55 and EVA Airways up 4.17 percent to end at NT$26.20.
However, the electronics sector underperformed the broader market with selling triggered by falling tech stocks on U.S. markets, Huang said, adding: "TSMC faced high short-term technical hurdles after it breached NT$600.00, while its long-term fundamentals are just fine."
Leading the electronics sector lower, TSMC, the most heavily weighted stock on the local market, fell 1.32 percent to close at the day's low at NT$600.00.
TSMC selling was seen among other semiconductor stocks. Among them, UMC lost 1.46 percent to end at NT$67.30, and integrated circuit packaging and testing services provider ASE Technology Holding Co. shed 2.75 percent to close at NT$106.00.
Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co. rose 1.43 percent to end at NT$106.50 after the world's largest contract electronics maker reported NT$621.71 billion in consolidated sales in November, an increase of 12.86 percent and the first time this year the company has posted more than NT$600 billion in monthly revenue.
Elsewhere, Formosa Plastics Corp. rose 0.48 percent to close at NT$104.00, and Nan Ya Plastics Corp. gained 0.72 percent to end at NT$84.20, while food brand Uni-President Enterprises Corp. fell 0.30 percent to close at NT$67.30, and YFY Inc. lost 0.86 percent to end at NT$34.60.
In the financial sector, which rose 0.43 percent, Cathay Financial Holding Co. rose 9.17 percent to close at NT$60.00 and Fubon Financial Holding Co. added 0.27 percent to end at NT$74.10.
"I expect more information about the Omicron variant to be released soon. Investors should pay close attention to that since how infectious and fatal the virus is could move the global financial markets," Huang said.
According to the TWSE, foreign institutional investors sold a net NT$7.85 billion worth of shares on the main board Monday.
Source: Focus Taiwan News Channel