Shares in Taiwan closed slightly lower Tuesday as investors worried about further foreign fund outflows out of the region and ignored a record high in the Dow Jones Industrial Average overnight, dealers said.
Large cap stocks in the bellwether electronics sector, including the world's largest contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), trended lower, putting pressure on the broader market.
But select old economy stocks in the construction and steel sectors appeared resilient and lent some support to the weighted index, dealers said.
The weighted index on the Taiwan Stock Exchange closed down 9.37 points, or 0.10 percent, at 8,931.03, after moving between 8,923.36 and 8,981.05, on turnover of NT$79.21 billion (US$2.49 billion).
The market opened down 0.14 percent on follow-through selling from a session earlier, even though blue chips on Wall Street continued their rise as the Dow Jones Industrial Average hit a new high overnight.
The stock market then moved in a narrow range throughout the rest of the session as the high-tech sector moved lower, with heavyweights such as TSMC and integrated circuit designer MediaTek Inc. (???) in the spotlight amid worries over the flight of foreign funds, they said.
"The Taiwan dollar has weakened sharply against the U.S. dollar in recent sessions as foreign investors moved funds back to the U.S. market on expectations of higher interest rates there as Trump's policy could boost inflation," Ta Ching Securities analyst Andy Hsu said.
The Taiwan dollar staged a mild rebound Tuesday from significant losses seen in the previous few sessions. Since the beginning of last week, the Taiwan dollar had fallen 1.51 percent against the Taiwan dollar as of Monday.
"The losses of the Taiwan dollar has left many equity investors worried about the outlook of the stock market as declining liquidity is the last thing stock investors want to see," Hsu said.
The electronics sector closed down 0.21 percent, and the semiconductor sub-index ended down 0.35 percent after TSMC, the most heavily weighted stock in the local market, fell 0.28 percent to close at NT$180.00, with 33.51 million shares changing hands.
Among other IC heavyweights, MediaTek lost 1.14 percent to end at NT$216.00, while IC packaging and testing service provider Advanced Semiconductor Engineering Inc. (???) ended unchanged at NT$33.35.
Bucking the downturn on the broader market, Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., gained 1.37 percent to close at NT$3,325.00 to remain the most expensive stock in the market.
Steel stocks got a boost from an increase in product prices on higher demand, Hsu said. In the sector, Tung Ho Steel Enterprise Corp. (??) rose 1.84 percent to close at NT$22.10, and Kao Hsing Chang Iron & Steel Corp. (???) gained 7.53 percent to end at NT$10.00.
In the construction sector, which moved higher on hopes that the government will speed up the pace of urban renewal, Kindom Construction Corp. (??) rose 7.95 percent to end at NT$16.30, and Kuo Yang Construction Co. (??) added 9.46 percent to close at NT$12.15.
Source: Focus Taiwan News Channel