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Taiwan shares end down as investors dump non-high tech stocks

Taiwan shares end down as investors dump non-high tech stocks

Taipei, Aug. 11 (CNA) Shares in Taiwan closed lower Tuesday after investors pocketed their earlier gains particularly in old economy and financial stocks, pushing the broader market into negative territory, dealers said. However, Taiwan Semiconductor Manufacturing Co. (TSMC, ???), along with other market blue chips such as smartphone camera lens supplier Largan Precision Co. (???), attracted buying, which helped prevent the broader market from falling further at the close, dealers said. The weighted index on the Taiwan Stock Exchange ended down 72.70 points, or 0.85 percent, at the day's low of 8,394.14, off an early high of 8,586.22. Turnover totaled NT$99.68 billion (US$3.12 billion) during the session. The market opened up 1.16 percent and rose to the day's high as investors took cues from a soaring Wall Street overnight, where the Dow Jones Industrial Average gained 1.39 percent and the tech-heavy NASDAQ index rose 1.16 percent, dealers said. However, after the local index moved to the nearest technical resistance point at around 8,600 points, selling set in, especially in large-cap stocks in the old economy and financial sectors, dealers said. This pulled down share prices as a whole, while select electronics heavyweights remained resilient, lending some support to the broader market, dealers said. "The technical hurdles ahead of 8,600 points remained high, and that's why investors tended to lock in their profits that resulted from a higher Wall Street, and then stepped back from the trading floor," Marbo Securities Investment Consulting analyst Chang Chih-cheng said. "The initial gains on the local main board failed to spur investors to chase share prices for the rest of the trading session, which indicated that market sentiment remained cautious after the recent sell-off," Chang said, referring to the about 1,500 point drop in the weighted index between late April and Aug 10. He said investors are still wary of a possible interest rate hike by the U.S. Federal Reserve later in the year, which may drain funds out of the region as foreign investors move their money back home. "Today's selling focused on financial and old economy stocks as investors were encouraged by the gains posted by TSMC's American depositary receipts (ADRs) overnight to move their funds into the electronics sector," Chang said. Largan's gains also reflected Tuesday's rotational buying, he said. The electronics sub-index outperformed the broader market, rising 0.06 percent, while the financial sector fell 1.28 percent and the petrochemical sector shed 2.80 percent. TSMC, the world's largest contract chip maker, rose 1.16 percent to close at NT$130.50 with 64.45 million shares changing hands after the company on Monday reported consolidated sales NT$80.95 billion for July, a monthly increase of 35 percent and a year-on-year growth of 24.7 percent. Largan, which is expected to benefit from an increase in orders from Apple Inc. for production of the next generation of iPhones, gained 5.53 percent to close at NT$3,150.00. Largan remains the most expensive stock in the local market, while TSMC is the most heavily weighted stock here. Among the falling non-tech stocks, Fubon Financial Holding Co. (???) dropped 2.41 percent to close at NT$56.80, food maker Uni-President Enterprises Corp. (??) shed 2.70 percent to end at NT$54.00, and Nan Ya Plastics Corp. (??) lost 3.44 percent to finish at NT$61.80. "After the index fell below the 8,400 point mark, the local main board appeared very fragile technically," Chang said. "Amid cautious sentiment, the index is likely to test 8,300 points in the short term." (By Frances Huang)


Updated : 2021-09-19 04:32 GMT+08:00