Shares in Taiwan moved slightly lower Friday as investors locked in earlier profits after the main board received an initial boost from an overnight rally on U.S. markets, dealers said.
The bellwether electronics sector sustained its upturn throughout the session, led by large cap semiconductor stocks, which offset the weakness of old economy and financial stocks, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 22.11 points, or 0.12 percent, at 17,676.95, after moving between 17,633.86 and 17,747.13. Turnover totaled NT$286.13 billion (US$9.99 billion).
The market opened down 3.26 points on follow-through selling from a session earlier, but soon regained its footing with investors encouraged to buy by gains on U.S. markets, where the Dow Jones Industrial Average rose 1.02 percent and the tech-heavy Nasdaq index grew 1.93 percent.
However, after the Taiex breached the 17,700 point mark at one point, some investors shifted to the sell side, cutting their positions, in particular in the non-tech sector, which pushed the main board into negative territory by the end of the session, dealers said.
Late boost from tech stocks
"Fortunately, semiconductor heavyweights, especially TSMC (Taiwan Semiconductor Manufacturing Co.), sustained their upturn as buying rotated to the tech sector, or the Taiex would have fallen further," Cathay Futures Consulting analyst Tsai Ming-han said.
With late session buying giving an additional boost, shares in contract chipmaker TSMC, the most heavily weighted stock on the local market, rose 1.18 percent to close at the day's high of NT$598.00.
On the back of TSMC's gains, the semiconductor sub-index rose 0.65 percent with the electronics sector up 0.36 percent.
"Today's buying in the electronics sector showed many investors temporarily set aside worries over the military conflict between Russia and Ukraine," Tsai said. "Rotational interest remained a dominant factor on the local main board."
Such buying was also seen among other semiconductor stocks, Tsai said.
Among them, United Microelectronics Corp., a smaller contract chipmaker, rose 0.19 percent to end at NT$53.30, display driver IC designer Novatek Microelectronics Corp. gained 0.23 percent to close at NT$435.50, and application specific IC Alchip Technologies, Ltd. jumped 2.90 percent to end at NT$1,065.00.
Bucking the upturn, smartphone IC designer MediaTek Inc. lost 0.10 percent to close at NT$971.00, and IC packaging and testing services provider ASE Technology Holding Co. fell 0.48 percent to end at NT$104.50.
Elsewhere in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. dropped 0.47 percent to close at NT$106.00, PC brand Acer Inc. fell 0.50 percent to end at NT$30.15, while Asustek Computer Inc., another Taiwanese PC vendor rose 0.27 to end at NT$374.00.
Underperformers
"The losses in raw material and shipping stocks showed investors rushed to lock in their recent profits when the semiconductor industry attracted most of market attention throughout the session," Tsai said.
After international crude oil prices fell about 2 percent overnight as the European Union (EU) could not agree on a plan to boycott Russian oil, local petrochemical stocks came under pressure, dealers said.
Among them, Formosa Plastics Corp. lost 0.47 percent to close at NT$106.50, and Formosa Chemicals & Fibre Corp. fell 0.63 percent to end at NT$79.30. Nan Ya Plastics Corp. closed unchanged at NT$92.40, and Formosa Petrochemical Corp. rose 0.84 percent to end at NT$96.20.
In the crude price sensitive textile sector, Far Eastern New Century Corp. dropped 0.81 percent to close at NT$30.60, and Makalot Industrial Co. shed 1.75 percent to end at NT$197.00.
Despite rising freight rates, the shipping industry led the transportation sector down as it plunged 4.03 percent, also due to profit taking.
Evergreen Marine Corp., the largest container cargo shipper in Taiwan shed 5.69 percent to close at NT$132.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. lost 4.69 percent and 4.06 percent, respectively, to end at NT$122.00 and NT$153.50.
In the financial sector, which lost 0.71 percent, Cathay Financial Holding Co. lost 1.24 percent to close at NT$63.50, and Fubon Financial Holding Co. fell 0.66 percent to end at NT$75.00.
"Investors had better keep alert over whether Russia and Ukraine reach a peace agreement. Such an accord could prompt investors to pick up tech stocks and push the Taiex up further to challenge the 60-day moving average of 17,911 points," Tsai said.
According to the TWSE, foreign institutional investors bought a net NT$727 million worth of shares on the main board Friday.
Source: Focus Taiwan News Channel