Taipei-Shares in Taiwan closed lower Tuesday as geopolitical unease returned to haunt market sentiment after North Korea launched a ballistic missile earlier in the day that flew over Japan before falling into the Pacific off the Japanese coast, dealers said.
However, the local main board recouped some of its earlier losses by the end of the session as bargain hunters bought into select major electronics stocks, taking advantage of the earlier downturn suffered by such market heavyweights as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the dealers said.
The weighted index on the Taiwan Stock Exchange closed down 29.41 points, or 0.28 percent, at 10,496.57, after moving between 10,463.22 and 10,518.69, on turnover of NT$107.226 billion (US$3.62 billion).
The market opened down 7.29 points and moved to the day's low in a knee-jerk reaction to the latest missile launch by North Korea, which was said to be in response to a joint military drill between the United States and South Korea, the dealers said.
With Japanese Prime Minister Shinzo Abe denouncing the missile launch as a "most serious and grave" threat to Japan and futures on Wall Street taking a beating, selling on the local main board escalated before bargain hunting emerged in the latter part of the session to limit the downturn by the end of the session, they said.
"Equity markets in the region were hit by the latest missile launch by Pyongyang, so it was unlikely for Taiwan to be isolated from the shock," Mega International Investment Services Corp. analyst Alex Huang said.
"In particular, investors in the region witnessed futures on the Dow Jones Industrial Average falling more than 100 points after the Pyongyang move, rushing to unload their holdings for the moment," Huang said.
"The silver lining was that the Taipei market appeared resilient after some investors were willing to buy on lows in the bellwether electronics sector," Huang said. "It seemed that the weighted index had some technical support ahead of the 10,486-point mark, the five-day moving average."
In the high-tech sector, TSMC, the most heavily weighted stock in the local market, closed unchanged at NT$216.00 after hitting a low of NT$215.00, with 16.14 million shares changing hands, and the late- session buying helped prevent the broader market from falling further, Huang said.
Also in the electronics sector, iPhone and iPad assembler Hon Hai Precision Industry Co. (??), second to TSMC in terms of market capitalization, ended unchanged at NT$115.50, off an early low of NT$115.00, while Largan Precision Co. (???), a smartphone camera lens supplier, fell 1.63 percent to close at NT$5,730.00 off an early low of NT$5,705.00.
The three stocks are part of Apple's supply chain. Among other Apple concept stocks, printed circuit board maker Zhen Ding Technology Holding Ltd. (??) rose 0.29 percent to close at NT$69.40, and metal casing supplier Catcher Technology Co. (??) gained 0.13 percent to end at NT$382.00.
"These Apple concept stocks were resilient today as investors remained upbeat about their momentum due to the planned launch of the next-generation iPhones," Huang said. The Wall Street Journal reported a day earlier that Apple is expected to unveil the new iPhones on Sept. 12.
In the non-high-tech sector, Formosa Plastics Corp. (??) fell 0.95 percent to close at NT$93.70, while food brand Uni-President Enterprises Corp. (??) rose 0.95 percent to end at NT$64.00. Mega Financial Holding Co. (???) closed down 0.41 percent at NT$24.00.
"Investors should pay close attention to how Washington will react to the latest Pyongyang military move, which could continue to move global financial markets in the short term," Huang said.
Source: Focus Taiwan News Channel