Taiwan shares end down ahead of U.S. job data

Shares in Taiwan closed slightly lower Friday on thin trading as market sentiment turned cautious ahead of the release of employment data in the United States, which could hint at the Federal Reserve's next move on interest rates, dealers said.

While the broader market ended in negative territory, select large-cap stocks, in particular Taiwan Semiconductor Manufacturing Co. (TSMC, ???), appeared resilient, preventing the weighted index from taking a bigger tumble, they said.

The weighted index on the Taiwan Stock Exchange closed down 18.5 points, or 0.2 percent, at 9,265.81, after moving between 9,249.06 and 9,289.95, on turnover of NT$60.76 billion (US$1.93 billion).

The market opened up 5.35 points and moved slightly higher to the day's high on follow-through buying from a session earlier before selling emerged, dealers said.

The weakness continued to the end of the session, while certain market heavyweights which moved higher served as anchors that stabilize the broader market, especially late in the trading session, they said.

"With the weighted index moving toward the 9,300-point mark, the nearest technical barrier for the market, it was no surprise that many investors preferred to stay on the sidelines for the time being," Ta Ching Securities analyst Andy Hsu said.

"More importantly, trading interest was limited as investors waited for the release of the U.S. job data for September later in the day at a time when worries over a rate hike by the Fed are on the rise," Hsu said.

Concerns over a rate hike in Washington in December have been fueled by recent comments made by several Fed officials, including Richmond Fed President Jeffrey Lacker, who pointed to a growing need for the U.S. central bank to tighten its monetary policy, Hsu said.

"Fortunately, TSMC and some other big players moved higher, in particular late in the trading session, which helped the broader market offset selling to some extent," Hsu said.

"But the low trading volume means it won't be easy for the index to move well above 9,300 points any time soon."

TSMC, the world's largest contract chip maker, rose 0.27 percent to close at the day's high of NT$188.00, off an early low of NT$186.00, with 15 million shares changing hands.

Buying in TSMC reflected optimism toward its sales for the third quarter as investors are hoping the chip maker, which supplies the A10 processor for the latest iPhone models, will benefit from the launch of Apple's new phones in September.

Among other large-cap stocks that gained ground, Formosa Plastics Corp. (??) rose 0.51 percent to close at NT$79.50 after hitting a low of NT$78.80, and Nan Ya Plastics Corp. (??) gained 0.64 percent to end at NT$63.00, off an early low of NT$62.30.

In the financial sector, which suffered relative heavy selling during the session and closed down 0.48 percent, Fubon Financial Holding Co. (???) lost 1.20 percent to end at NT$45.30, while E. Sun Financial Holding Co. (???) closed unchanged at NT$18.15.

"The earnings season here is scheduled to kick off next week so I expect that investors will keep alert, which will continue to cap trading volume in the near future," Hsu said.

Source: Focus Taiwan News Channel