Taiwan shares edge down; Largan rebounds

Taiwan shares edge down; Largan rebounds

Taipei, Sept. 13 (CNA) Shares in Taiwan ended slightly lower Tuesday as investors pocketed gains from earlier in the day, pushing the weighted index into negative territory by the end of the session amid lingering concerns over more foreign fund outflow, dealers said.

The bellwether electronics sector closed mixed, but Largan Precision Co., a smartphone camera lens supplier to Apple Inc., staged a strong technical rebound from a slump seen a day earlier on the back of bargain hunting, which lent support to the broader market, the dealers said.

The weighted index on the Taiwan Stock Exchange closed down 6.23 points, or 0.07 percent, at 8,940.83, after moving between 8,885.55 and 9,014.75, on turnover of NT$77.82 billion (US$2.45 billion).

The market opened up 0.41 percent and rose to the day's high in a knee-jerk reaction to a higher Wall Street, where the Dow Jones Industrial Average bounced back by 1.32 percent overnight after Fed Governor Lael Brainard, a voting member of the central bank's policymaking committee, said that although the U.S. economy continues to improve, it would be wise for the Fed to keep its monetary policy loose.

With the local weighted index breaching the 9,000-point mark at one point, selling set in to erode the earlier gains and put the entire market in consolidation mode for the rest of the session, the dealers said.

"While Brainard spoke, holding a dovish attitude toward a rate hike by the Fed, uncertainty remained in place as the Fed appeared divided over whether it should tighten its monetary policy," KGI Securities analyst Phil Chu said.

Last week, Boston Fed President Eric Rosengren, another voting member of the central bank, hinted at a need for the bank to raise interest rates, which led to a drop on Wall Street and the global financial markets, and prompted foreign investors to move funds out of the region, betting on a higher U.S. dollar.

"Before the Fed makes up its mind in a two-day policymaking meeting set to end Sept. 21, such worries are expected to continue to haunt equity investors. Therefore, many of them preferred to refrain from buying at the moment, as worries over a further fund exodus remained in place," Chu said. The bellwether electronics sector closed up only 0.08 percent after Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, ended unchanged at NT$175.00.

Hon Hai Precision Industry Co., an assembler of iPhones and iPads for Apple Inc., fell 0.39 percent to close at NT$77.20, while Largan Precision Co., a smartphone camera lens supplier to Apple, gained 5.11 percent to end at NT$3,495.00, rebounding from a 3.62 percent dive seen a day earlier.

"Largan served as an anchor to stabilize the broader market today," Chu said. "But market sentiment toward sales of the latest iPhone models remained cautious."

In the non-high tech sector, Eclat Textile Co. fell 3.21 percent to close at NT$346.50 and Highwealth Construction Corp. lost 0.93 percent to end at NT$47.75, while Cathay Financial Holding Co. lost 1.39 percent to close at NT$39.15.

"Investors here were caught off-guard by a large net sale of NT$15 billion by foreign institutional investors yesterday. Fears over more foreign selling also prevented investors from chasing prices as the index moved higher initially today," Chu said.

According to the TWSE, foreign institutional investors sold a net NT$7.29 billion-worth of shares on the main board Tuesday. (By Frances Huang)

Updated : 2021-03-07 07:48 GMT+08:00