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Taiwan shares end lower amid concerns over Q2 outlook

Taiwan shares end lower amid concerns over Q2 outlook

Taipei, April 30 (CNA) Shares in Taiwan closed lower Thursday amid concerns over a slow second quarter in the local high-tech sector as implied by the cautious outlook of several market analysts, dealers said. While large-cap electronics stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC, ???) encountered downward pressure based on earnings concerns, buying rotated to some old economy stocks, in particular in the textile sector, lending support to the broader market, dealers said. The weighted index on the Taiwan Stock Exchange ended down 33.78 points, or 0.34 percent, at the day's low of 9,820.05, off an early high of 9,894.90. Turnover totaled NT$112.48 billion (US$3.65 billion) during the session. The market opened down 7.65 points in a reaction to losses on Wall Street overnight after the United States reported first-quarter economic growth of only 0.2 percent year-on-year, well below the market estimate of 1 percent, dealers said. After the initial downturn, the local bourse staged a mild technical rebound, rising to the day's high, but selling set in again and became more obvious late in the trading session, dealers said. They said the selling, which was focused on high-tech heavyweights, dragged down share prices to the day's low at the close. "The anemic first-quarter economic growth in the U.S. caused many investors to worry about global demand from the world's biggest economy," Mega International Investment Services Corp. analyst Alex Huang said. "In addition, worry over a slow season for the global high-tech industry in the second quarter gave rise to concerns about the bottom line of Taiwan's bellwether electronics sector", the backbone of the country's exports, Huang said. TSMC, the world's largest contract chip maker and the most heavily weighted stock on the local market, fell 1.01 percent to close at NT$147.00 with 48.95 million shares changing hands, leading a drop in the electronics sector. In its second-quarter guidance, TSMC projected a 7-8 percent quarterly decline in sales, higher than the market forecast of a 5 percent drop. Personal computer vendor Asustek Computer Inc. (??) fell 1.06 percent to end at NT$325.00, and integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) shed 1.58 percent to close at NT$43.60. "Investors are also worried that a stronger Taiwan dollar will deal another blow to these high-tech exporters," Huang said. "Until the slow season effects fade in second half of the year, these market heavyweights may see more volatility." Bucking the downturn, IC packaging and testing services provider Siliconware Precision Industries Co. (??) ended up 0.80 percent at NT$50.60 after its second-quarter guidance of a 1.9 percent-7.6 percent quarterly growth in revenue. In the textile sector, which ended up 1.15 percent on the back of rotational buying, Formosa Taffeta Corp. (????) gained 3.69 percent to close at NT$36.50, and Nan Yang Dyeing & Finishing Co. (??) rose by the maximum daily 7 percent to end at NT$27.90. "After a (1.03 percent) plunge Wednesday, the local bourse is now in consolidation mode," Huang said. "Further selling may emerge but the market is likely to see technical support at around 9,700 points in the short term." (By Frances Huang)


Updated : 2021-09-25 15:18 GMT+08:00