Taipei--Shares in Taiwan closed little changed Monday as investors locked in earlier gains amid concerns over corporate earnings for the first quarter, when a stronger Taiwan dollar affected many export-oriented electronics firms' profitability, dealers said.
The fears over a foreign exchange impact loomed larger during the ongoing earnings season, prompting investors to take profits on Monday, while a plunge in the equity market in China caused by the Chinese authorities' measures to crack down on leverage trading in the financial sector also led investors here to shift to the sell side, the dealers said.
While many large-cap stocks in the bellwether electronics sector were in the doldrums, smartphone camera lens supplier Largan Precision Co. (???), the most expensive stock in the local market, still posted gains, which lent some support to the broader market, they added.
The weighted index on the Taiwan Stock Exchange ended up 0.54 points, or 0.01 percent, at 9,717.95, after moving between 9,683.70 and 9,772.96, on turnover of NT$61.42 billion (US$2.03 billion).
The market opened up 0.26 percent and rose to the day's high due to eased fears over volatility in global financial markets after the first round of the presidential election in France, in which centrist candidate Emmanuel Macron emerged as the most likely eventual winner, the dealers said.
However, with the weighted index moving closer to the nearest technical resistance level of around 9,800 points, investors rushed to pocket their earlier gains as corporate earnings concerns and a decline in Chinese equities placed downward pressure on local equities until the end of the session, they said.
"Investors are still waiting for more results for the first quarter," Concord Securities analyst Kerry Huang said. "Before all of them put their reports on the table, the local equity market will remain shadowed by fears of large foreign exchange losses."
In the first quarter, the Taiwan dollar rose more than 6 percent against the U.S. dollar, which eroded many high-tech firms' bottom lines. Among them, Largan, a smartphone camera lens supplier to Apple, reported on April 13 that it incurred NT$1.14 billion in foreign exchange losses, dragging down its earnings per share for the quarter by more than NT$8.
"The market has been watching closely how PC brands and manufacturers will report their quarter earnings under such unfavorable circumstances. So it was no surprise that the local equity market remained in consolidation mode today," Huang said.
Largan rose 0.41 percent to close at NT$4,895.00, off an early high of NT$4,980.00, but the closing level was the highest in the stock's history amid continued optimism toward the lead over its peers in production technology.
Contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, ended unchanged at NT$190.00 after hitting a low of NT$188.50.
"Although TSMC could be affected by slow-season effects in the second quarter, many investors have faith that its operations will bounce back in the third quarter," Huang said. "Judging from today's movement, I think that the stock has strong technical support at around NT$188." TSMC reported about NT$6 billion in foreign exchange losses for the first quarter.
The cement sector, which benefited from a technical rebound staged by Taiwan Cement Corp. (??) closed up 1.09 percent. Taiwan Cement rose 1.83 percent to end at NT$36.25 and Asia Cement Corp. (??) gained 1.52 percent to close at NT$30.10.
"With the season for people here to pay taxes approaching, investors also have concerns that the major shareholders of listed companies will cut their holdings to meet fund demands. These worries are expected to keep affecting market sentiment," Huang said.
Memory chip module maker ADATA Technology Co.(??) Chairman Simon Chen (???) filed an application with the TWSE Monday to sell 2.5 million ADATA shares. After the application surfaced, ADATA closed down 5.23 percent at NT$68.90.
Source: Focus Taiwan News Channel