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Taiwan shares end lower; turnover rises ahead of MSCI changes

Taiwan shares end lower; turnover rises ahead of MSCI changes

Taipei, May 29 (CNA) Shares in Taiwan ended lower Friday in consolidation mode, but turnover expanded as foreign institutional investors cut their holdings before MSCI index adjustments took effect after the market close, dealers said. Exchange traded funds (ETFs) issued in Taiwan and linked to A shares in China fell sharply as investors here took cues from a plunge in China's equity market a day earlier, dealers said. The weighted index on the Taiwan Stock Exchange ended down 11.77 points, or 0.12 percent, at 9,701.07, after moving between 9,693.00 and 9,747.27. Turnover totaled NT$140.39 billion (US$4.57 billion) during the session. The market opened up 0.26 percent and rose to the day's high on follow-through buying, but with the index moving closer to the nearest technical resistance at around 9,750 points, investors started pocketing their gains, with the selling focused on electronics and financial heavyweights, dealers said. "The market moved in a narrow range throughout the session on a lack of any indications," Concord Securities analyst Kerry Huang said. "But the trading volume increased ahead of the MSCI index adjustment, which took effect after the market close." The MSCI indices are usually closely watched by foreign institutional investors, who tend to adjust their portfolios based on MSCI changes, dealers said. After the market close, Taiwan's weighting in the MSCI Emerging Markets Index was lowered to 12 percent from 12.15 percent, while its weighting in the MSCI All-Country Asia ex-Japan Index was downgraded to 14.27 percent from 14.49 percent. Except for the MSCI factors, there were no indicators for the broader market, Huang said. "The market was drifting without direction as large-cap stocks, such as Taiwan Semiconductor Manufacturing Co (TSMC, ???), remained in the doldrums," he said. "Investor sentiment continued to be haunted by worries over the debt situation in Greece." The electronics sub-index closed down 0.09 percent as investors locked in their earlier profits after the tech-heavy NASDAQ index retreated overnight. TSMC, the most heavily weighted stock on the local market, fell 0.68 percent to close at NT$146.00. Among other tech stocks, flat panel maker AU Optronics Corp. (??) dropped 0.59 percent to close at NT$16.85, while Hon Hai Precision Industry Co. (??), whose weighting in the MSCI indices has been raised 0.4 percentage points, ended up 0.81 percent at NT$99.10. In the non-high tech sector, Cathay Financial Holding Co. (???) fell 1.08 percent to close at NT$54.90, and Fubon Financial Holding Co. (???) lost 1.25 percent to end at NT$63.20, while Formosa Plastics Corp. (??) rose 0.27 percent to close at NT$75.30. Among the falling A share ETFs, Fubon SSE180 ETF ended down 2.88 percent at NT$40.45, and Yuanta/P-share SSE50 ETF closed down 3.38 percent at NT$34.90. "I think the local bourse will become more volatile next week as the daily fluctuations will increase to 10 percent starting Monday, from 7 percent at present," Huang said. (By Frances Huang)


Updated : 2021-09-21 07:44 GMT+08:00