Dragged down by declining European and U.S. markets, the weighted index on the Taiwan Stock Exchange slipped 25.37 points, or 0.29 percent, to finish at 8862.42 on Wednesday, failing to maintain its 31-day average. Turnover continued its contraction to NT$67.22 billion, the lowest point since NT$67.12 billion on April 21.
The Taiwan stock market resisted the downward spiral among Asian stock markets at the start by climbing 6 points on net buying from foreign investors. However, the session turned flat throughout the day and ended down.
The value weighted electronic and financial stocks mostly dropped on Wednesday. Largan Precision (3008), the world’s leading smartphone camera lens supplier, stayed weak with a 0.5 percent decrease. The late-session selling largely focused on financial stocks that had gained in the past few sessions; the dealers said some investors locked in their recent gains to add downward pressure to the broader market.
Hon Hai (2317) share prices gave up 0.66 percent as one nominee for the National Communication Commission said Wednesday she would oppose the purchase of 4G telecommunications equipment from China’s Huawei Technologies Co., Ltd. for national security reasons, leaving some uncertainty over its 4G development plan in Taiwan and worrying investors.
Integrated circuit designer MediaTek Inc. (2454) lost 1.52 percent to close at NT$488.50, and smartphone vendor HTC Corp. (2498) shed 1.52 percent to end at NT$162.50. Taiwan Semiconductor Manufacturing Co. (TSMC) (2330), the most heavily weighted stock in the local market, closed down 0.41 percent at NT$120.50.
Selling in select old economy stocks, in particular in the textile sector, continued as investors remained worried about operations in Vietnam affected by anti-China protests in the Southeast Asian country, they added. The textile sub-index closed down 1.44 percent. Among the falling textile stocks, Makalot Industrial Co. (1477) fell 1.66 percent, and Eclat Textile Co. (1476) lost 7 percent to its daily limit.
"Looking at the thin trading volume, I suspect that many foreign institutional investors stayed on the sidelines, which made it hard for the broader market to overcome strong technical resistance," Mega International Investment Services Corp. analyst Alex Huang said.
Foreign institutional investors (including mainland investors) sold a net NT$ 858 million, dealers sold a net NT$977 million, and securities investment trust companies sold a net NT$329 million. The net buying totaled NT$2.16 billion.