Taipei, Shares in Taiwan moved lower to close below the 10,900 point mark Monday as investors locked in earlier gains, which pushed down the broader market into negative territory by the end of the session, dealers said.
Turnover remained thin as many investors stayed on the sidelines ahead of the upcoming five-day Tomb Sweeping Festival holiday, amid fears over possible negative leads coming out from global markets that could impact local equities, the dealers said.
The weighted index on the Taiwan Stock Exchange, or Taiex, ended down 31.22 points, or 0.29 percent, at 10,888.27, after moving between 10,882.05 and 10,969.88, on turnover of NT$101.94 billion (US$3.50 billion).
The market opened up 0.15 percent on follow-through buying from a session earlier, but with the Taiex moving closer to the critical psychological 11,000-point level, selling set in as investors tended to pocket their earlier gains before the long holiday begins Wednesday, the dealers said.
"It was understandable that market sentiment turned cautious, as investors here have fears of possible volatility in the global markets, in particular on Wall Street, during the holiday," Concord Securities analyst Kerry Huang said.
"Such caution kept many investors at bay and the turnover low, which forced large-cap stocks into consolidation mode and limited fluctuations of the index throughout the session," Huang said.
In the bellwether electronics sector, which fell 0.46 percent to 454.39, off an early high of 459.82, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, lost 0.40 percent to end at NT$246.50 after hitting a high of NT$249.00.
Also in the high-tech sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, dropped 0.45 percent to NT$88.10, off an early high of NT$89.40 as investors continued to dispose of the stock on the back of disappointing results for 2017.
In addition, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., also lost 4.93 percent to close at NT$3,185.00 after hitting an early high of NT$3,385.00.
"With the electronics sector in the doldrums, buying rotated to select old economy stocks, lending some support to the broader market," Huang said. "I think the buying came from local major market players."
Among the gaining old economy stocks, food brand Uni-President Enterprises Corp. rose 0.58 percent to close at NT$69.40, and Eclat Textile Co. grew 2.63 percent to end at NT$351.00.
In addition to the long holiday effect, "investors have been anxiously watching whether a trade war will erupt any time soon between the U.S. and China, so they preferred to keep their hands off equities now," Huang said.
On Sunday, the Chinese government said it is planning to immediately impose tariffs on 128 U.S. products, including pork and select fruit, which has been perceived as a direct response to U.S. President Donald Trump's recent moves to pursue numerous trade restrictions against Beijing.
According to the TWSE, foreign institutional investors sold a net NT$2.08 billion-worth of shares on the main board Monday.
Source: Focus Taiwan News Channel