Taipei, Sept. 7 (CNA) Shares in Taiwan extended losses from a session earlier to close below the 10,900-point mark Friday as investors remained cautious about ongoing trade friction between the United States and China ahead of an announcement by Washington about imposing tariffs on additional Chinese goods, dealers said.
While contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, appeared resilient, the broader market still weakened as investors were also concerned over a possible fund exodus from the region, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended down 77.31 points, or 0.71 percent, at 10,846.99, after moving between 10,807.56 and 10,922.55, on turnover of NT$148.76 billion (US$4.83 billion).
The market opened down 1.75 points and selling escalated as investors took cues from a falling Wall Street, where the tech-heavy Nasdaq index closed down 0.91 percent and the S&P 500 index ended down 0.37 percent, the dealers said.
Downward pressure on the local main board continued in reflection of the weakness of other regional markets amid fears over the Washington-Beijing trade dispute before some bargain hunters emerged to help the Taiex recover some of its earlier losses by the end of the session, they said.
"Many investors were holding their breath, watching closely to see when the U.S. will announce the latest list of tariffs on additional Chinese goods worth US$200 billion," Hua Nan Securities analyst Kevin Su said.
China's Ministry of Commerce has said that if the U.S. implements the new tariffs, the Chinese government will retaliate. Market analysts fear that an escalation of the trade war between the world's two largest economies will undermine global demand and slow down the pace of economic recovery.
"So investors here tended to cut their holdings and keep their money for the moment, which is why the broader market continued a downtrend from a session earlier," Su said. On Thursday, the Taiex closed down 0.64 percent.
Among the falling stocks, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, fell 2.02 percent to close at NT$77.70 after the stock fell below the NT$80 mark, and memory chip maker Nanya Technology Corp. shed 9.59 percent to end at NT$57.50 amid fears of falling DRAM prices in the global market.
Smartphone brand HTC Corp. lost 6.56 percent to close at NT$39.90, the lowest level since the company launched a listing in Taiwan in March 2002, as investors were motivated by its poor sales in August, which fell to a 15-year low of NT$1.39 billion.
"Fortunately, TSMC posted gains to prevent the broader market from falling further," Su said. "I guess the buying in TSMC came from foreign institutional investors who wanted to use the stock to support the index, as they still owned plenty of long position futures contracts."
TSMC rose 1.15 percent to close at NT$264.00, with 38.62 million shares changing hands. According to the TWSE, foreign institutional investors bought a net NT$1.03 billion-worth of shares on the main board Friday.
Also outperforming the broader market, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 1.94 percent to close at NT$4,730,00, giving additional support to the Taiex, Su said.
"Selling focused on tech stocks today, so old economy stocks seemed resilient throughout the session," Su said.
In the old economy sector, China Steel Structure Corp. gained 3.27 percent to close at NT$28.40 and Formosa Chemicals & Fibre Corp. gained 0.42 percent to end at NT$120.00, while Formosa Plastics Corp. closed unchanged at NT$111.50.
"Investors have to keep alert over the recent weakness of currencies in emerging economies at a time of a rate hike in the U.S.," Su said. "There are fears that a stronger greenback will lead fund outflows from the region."
Source: Focus Taiwan News Channel