Shares in Taiwan closed slightly lower Friday after giving up earlier gains as investors locked in profits built in recent sessions amid eased concerns over the rate hike cycle policy of the United States Federal Reserve, dealers said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) continued to serve as an anchor preventing the broader market from falling further at a time when selling focused on old and financial stocks, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 30.24 points, or 0.21 percent, at 14,504.99 after moving between 14,470.48 and 14,660.98. Turnover totaled NT$236.37 billion (US$7.58 billion).
The market opened up 0.34 percent and rose to the day’s high in the early morning session, with TSMC continuing its uptrend as investors ignored losses on U.S. markets, where the S&P 500 index lost 0.31 percent, and the tech-heavy Nasdaq index 0.35 percent overnight, dealers said.
However, with the Taiex topping the 14,600-point mark at one point, some investors shifted to the sell side by taking profits from TSMC’s upturn, while old economy stocks, in particular in the cement and shipping industries, faced headwinds that dragged the broader market into negative territory by the end of the session, dealers added.
“After a rally in recent sessions, the local main board fell into consolidation mode today,” Concord Capital Management analyst Lu Chin-wei said. “Friday’s turnover fell to the lowest in the week, demonstrating caution among investors about major corrections.”
Before Friday, the Taiex had soared 1,585.48 points or 12.24 percent since the beginning of November.
“Fortunately, TSMC remained resilient, helping the broader market offset the downturn mostly seen among non-tech stocks,” Lu said, adding that the stock continued to benefit from the news that American investment guru Warren Buffet’s Berkshire Hathaway had purchased US$4.1-billion worth of the chipmaker’s American depositary receipts (ADRs) as of the end of September.
Nevertheless, “it seems TSMC’s momentum has been fading as the stock failed to challenge the nearest technical resistance ahead of NT$500,” Lu said.
After coming off a high of NT$494.00, TSMC rose 0.41 percent to close at NT$487.00. Led by TSMC, the semiconductor sub-index rose 0.25 percent to outperform the Taiex, while the electronics sector ended flat.
Since the beginning of this week, TSMC shares have surged 18.35 percent and its gains served as a driver to the Taiex’s increase.
Despite TSMC’s resilience, other semiconductor heavyweights moved into the doldrums with United Microelectronics Corp., a smaller contract chipmaker, ending unchanged at NT$45.60.
Smartphone IC designer MediaTek Inc. fell 0.41 percent to close at NT$725.00, and Powerchip Semiconductor Manufacturing Co., another smaller contract chipmaker, lost 1.46 percent to end at NT$33.65.
Also in the electronics sector, where many large cap stocks headed south, iPhone assembler Hon Hai Precision Industry Co. lost 0.99 percent to close at NT$100.50, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., shed 1.51 percent to end at NT$2,280.00.
“Old economy stocks largely came under pressure as investors feared weakening global demand for raw materials and shipping services,” Lu said.
The cement sector lost 1.23 percent with Taiwan Cement Corp. falling 2.77 percent to close at NT$33.30, and rival Asia Cement Corp. shedding 0.48 percent to end at NT$41.25.
Elsewhere, Formosa Chemicals & Fibre Corp. lost 1.23 percent to close at NT$72.00, while Formosa Plastics Corp. bucked the downturn, rising 0.34 percent to end at NT$87.70.
In the transportation sector, which shed 1.73 percent amid falling freight rates, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, lost 2.27 percent to close at NT$150.50 and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. dropped 2.78 percent and 3.23 percent, respectively, to end at NT$63.00 and NT$71.80.
Also in the sector, EVA Airways rose 1.16 percent to close at NT$26.55, while China Airlines lost 0.58 percent to end at NT$17.20.
The financial sector closed down 0.60 percent with Mega Financial Holding Co. falling 2.11 percent to end at NT$32.20, CTBC Financial Holding Co. shedding 1.15 percent to close at NT$21.40, while Cathay Financial Holding Co. rose 0.84 percent to end at NT$41.90.
“The Taiwan dollar appeared stable against the U.S. dollar in recent sessions, indicating no large fund exit as concerns over the Fed’s rate hikes have been priced in,” Lu said.
“Ample liquidity levels are expected to prevent the Taiex from falling below 14,200 points in case of any technical corrections in the short term.”
According to the TWSE, foreign institutional investors sold a net NT$2.40 billion worth of shares on the main board Friday, when the U.S. dollar rose only NT$0.012 against the Taiwan dollar to close at NT$31.170.
Source: Focus Taiwan News Channel