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Taiwan shares under pressure in mid-morning session

Taiwan shares under pressure in mid-morning session

Taipei, June 1 (CNA) Taiwan shares came under pressure in mid-morning trade Monday as investors took cues from last Friday's losses on Wall Street to dump their holdings, dealers said. The semiconductor sector trended lower, led by Taiwan Semiconductor Manufacturing Co. (TSMC, ???), amid concerns that the world's largest contract chip maker will suffer as a result of inventory adjustments in the third quarter, dealers said. Large-cap stocks like TSMC, however, did not encounter intolerable selling pressure, dealers said, noting that the expansion of the market's maximum fluctuation from 7 percent to 10 percent took effect Monday. As of 10:57 a.m., the weighted index on the Taiwan Stock Exchange had fallen 0.82 percent to 9,621.66 points on turnover of NT$49.54 billion (US$1.61 billion). The semiconductor sub-index was down 1.08 percent, and the electronics sub-index was 1.22 percent lower. "Investors simply seized the downturn on Wall Street on Friday as an excuse to sell this morning, while lingering concerns over the debt problems in Greece also dampened investor sentiment," Mega International Investment Services Corp. Alex Huang said. The Dow Jones Industrial Average closed down 0.64 percent Friday after the United States revised its first-quarter economic growth figure from 0.2 percent to minus 0.7 percent. "The current selling is focused on the bellwether electronics sector amid worries over TSMC's second-quarter sales growth," Huang said. "Led by TSMC, other semiconductor stocks are also facing pressure." TSMC, the most heavily weighted stock on the local market, had dropped 1.03 percent to NT$144.50, with 155.15 million shares changing hands, after UBS Securities forecast a 3 percent sequential increase in TSMC's consolidated sales for the third quarter, citing customer inventory adjustments. Other foreign institutional investors have forecast TMSC's third-quarter consolidated sales growth at 8 percent. Among other falling semiconductor stocks Monday, integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) had fallen 1.70 percent to NT$43.25, and rival Siliconware Precision Industries Co. (??) had dropped 3.15 percent to NT$49.20. "The selling simply reflected worries over fundamentals and had nothing to do with the expansion of stock price movement," Huang said. "As foreign institutional investors hold a large chunk of these large cap stocks, the change did not prompt them to place more selling orders on these stocks," he said. "I think the new rules will affect retail investors more than institutional investors." In addition to the 10 percent fluctuation limit, the amount of equity required by investors to maintain their margin trading accounts -- known as the collateral maintenance ratio -- has been increased from 120 percent to 130 percent of the amount an investor borrows on margin. (By Frances Huang)


Updated : 2021-09-22 21:50 GMT+08:00