Taipei-Shares in Taiwan plunged about 1 percent Monday as selling focused on the bellwether electronics sector, which plunged the weighted index below the 10,300-point mark at the close, dealers said.
While market sentiment remained haunted by geopolitical tension between the United States and North Korea, many investors had also feared that foreign institutional investors would continue to cut their holdings in local equities after a massive net sell recorded on Friday, the dealers said.
The weighted index on the Taiwan Stock Exchange closed down 104.29 points, or 1.01 percent, at the day's low of 10,225.28, off an early high of 10,365.22, on turnover of NT$107.413 billion (US$3.55 billion).
The market opened up 0.17 percent and rose to the day's high in the early morning session on the back of a rebound staged on Wall Street, where the Dow Jones Industrial Average rose 0.07 percent and the tech-heavy NASDAQ index gained 0.64 percent on Friday, the dealers said.
With the local weighted index moving closer to the nearest technical resistance level at around 10,400 points, some investors shifted to the sell side, and the selling intensified as they saw losses incurred by the electronics sector increasing amid fears of more foreign institutional selling, they said.
"The plunge on the main board showed a lack of confidence for the moment amid lingering geopolitical unease. More importantly, investors seemed to have fears that foreign investors will keep cutting their holdings here after Friday's sell-off," Hua Nan Securities analyst Kevin Su said.
While the weighted index closed down only 0.17 points on Friday after recovering most of its earlier losses, foreign institutional investors sold a net NT$9.08 billion (US$300 million)-worth of shares.
"Large-cap high-tech stocks were the victims of today's selling, as electronics stocks have been liquid and it has been easy for investors to capitalize on their earlier gains for the moment," Su said.
After Friday's sell-off, foreign institutional investors seemed to refrain from equity unloading Monday, when a net sell was reduced to NT$1.92 billion, according to the TWSE.
The electronics sector, which accounted for more than 66 percent of the total turnover, fell 1.34 percent on Friday after select heavyweight suppliers to Apple Inc. came under heavy pressure, the dealers said.
Among the Apple concept stocks iPhone assembler Hon Hai Precision Industry Co. (??), the second-largest stock in terms of market capitalization, shed 2.15 percent to close at NT$114.00, and touch panel maker General Interface Solution (GIS) Holding Ltd. (??) lost 0.96 percent to end at NT$308.00.
GIS, a subsidiary of Hon Hai Group, rose 6.51 percent on Friday after MSCI Inc. announced an inclusion of the stock into the MSCI Global Standard Indexes following a quarterly index review.
Also in the high-tech sector, integrated designer MediaTek Inc. fell 2.10 percent to close at NT$280.00, and IC packaging and testing firm Advanced Semiconductor Engineering Inc. (???) lost 2.51 percent to end at NT$36.90.
Contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) appeared resilient compared with other tech heavyweights, down 0.71 percent at NT$211.00, with 29.30 million shares changing hands.
In the financial sector, which fell 0.62 percent, First Financial Holding Co. (???) shed 1.32 percent to close at NT$18.65, E. Sun Financial Holding Co. (???) lost 0.84 percent to end at NT$17.75, and Fubon Financial Holding Co. (???) dropped 0.63 percent to close at NT$47.00.
"Today's heavy selling has made the main board weaker technically," Su said. "Investors should continue to pay attention to what foreign institutional investors will do with their holdings, which remains critical to the movement."
Source: Focus Taiwan News Channel