Taiwan shares end slightly down; UMC dives on reported heavy fine

Taipei, Shares in Taiwan closed slightly lower Monday after most earlier losses were recouped by the end of the session as bargain hunters turned active to pick up heavyweights in both the electronics and non-tech sectors, dealers said.

After recovering from their earlier losses, large-cap stocks in the Apple Inc. supply chain remained in negative territory at the close on lower-than-expected sales guidance given by the U.S. consumer electronics giant for the October-December period, which raised concerns over the latest iPhone sales, the dealers said.

United Microelectronics Corp. (UMC), the second-largest contract chipmaker in Taiwan, came under heavy pressure as international media reported over the weekend that the company could face a heavy fine after it was indicated by the U.S. Department of Justice for conspiring to steal trade secrets from U.S. chipmaker Micron Technology Inc., the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, closed down 16.78 points, or 0.17 percent, at the day's high of 9,889.81, off an early low of 9,786.25, on turnover of NT$102.88 billion (US$3.35 billion).

The market opened down 0.50 percent as investors took cues from a 0.43 percent fall in the Dow Jones Industrial Average on Wall Street on Friday, and selling escalated, with some major Apple concept stocks in focus, which pushed down the Taiex by more than 100 points at one point, the dealers said.

With the main board falling below 9,800 points, some bargain hunters jumped onto the trading floor to snatch heavyweights almost across the board, and their buying appeared more obvious in the late trading session, helping the Taiex return to that level by the end of the session, they said.

"After the Taiex fell below 9,800 points, the main board was oversold, prompting investors to pick up bargains," Concord Securities analyst Kerry Huang said.

"A lot of major shareholders of listed companies simply took advantage of the relatively low valuations to buy after today's earlier plunge," he said.

Among the large-cap stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, fell 0.63 percent to close at NT$235.00, with 25.45 million shares changing hands.

Also in the electronics sector, Largan Precision Co., a smartphone camera lens supplier to Apple, lost 2.55 percent to end at NT$3,435.00 but recovered from a low of NT$3,390.00, and iPhone assembler Hon Hai Precision Industry Co. lost 1.23 percent to close at NT$80.00, off an early low of NT$79.50.

"The losses suffered by these Apple concept stocks largely reflected the disappointing sales guidance released by the U.S. firm last week, as well as a decision by Apple not to report sales numbers of hardware devices, which raised concerns over possible weakness of iPhone sales," Huang said.

On Friday, Apple shares closed down 6.63 percent after an investor conference held Thursday to give its sales forecast and a decision not to disclose sales figures.

Seeing no support from bargain hunting, UMC, a smaller rival to TSMC, fell 10 percent, the maximum daily decline, to close at NT$10.75, with 233.79 million shares changing hands.

The stock faced heavy selling after foreign media reports said UMC could be fined more than US$20 billion if the company is found guilty of stealing confidential information from Micron.

Bargain hunters also bought into non-tech stocks in the late trading session, lending more support to the broader market, Huang said.

Among them, food brand Uni-President Enterprises Corp. rose 0.93 percent to close at NT$76.30, off a low of NT$74.30, and Formosa Plastics Corp. gained 1.98 percent to end at NT$103.00 after hitting NT$100.00.

In the financial sector, which closed up 0.20 percent, Fubon Financial Holding Co. rose 0.61 percent to close at NT$49.20, and Yuanta Financial Holding Co. added 0.99 percent to end at NT$15.35.

"The main board could continue to bounce back after recent heavy losses but the nearest stiff technical resistance is expected ahead of 10,000 points," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$375 million-worth of shares on the main board Monday.

Source: Focus Taiwan News Channel