Taipei, Shares in Taiwan closed lower on Tuesday in response to a volatile Wall Street overnight, but losses were limited as bargain hunters emerged to pick up select large cap stocks after the main board fell below the 11,000 point mark, dealers said.
Turnover remained moderate with investors wary over a possible global trade war and Washington expected to impose tariffs on Chinese-made goods by Friday. Investors are also cautious ahead of a policymaking meeting scheduled by the U.S. Federal Reserve for later in the day, they said.
The weighted index on the Taiwan Stock Exchange or the Taiex closed down 36.06 points, or 0.33 percent, at 11,010.84, after moving between 10,981.04 and 11,020.78, on turnover of NT$109.69 billion (US$3.76 billion).
The market opened down 0.27 percent, with selling sparked by a falling U.S. market, where the Dow Jones Industrial Average fell 1.35 percent and the tech-heavy NASDAQ index lost 1.84 percent on Monday after a plunge in the value of Facebook pressured the technology sector, dealers said.
Led by their U.S. counterparts, large stocks in Taiwan fell, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), pushing down the broader market, but as the Taiex fell below 11,000 points, buying emerged to cap the downturn by the end of the session, they said.
"The Taiwan market appeared resilient compared with Wall Street," Concord Securities analyst Kerry Huang said.
"Facebook's heavy losses had a big impact on Internet related stocks in the region but for Taiwan, the hardware savvy economy lent support to the local technology sector and prevented the main board from falling further," Huang said.
Facebook shares fell 6.8 percent in the wake of reports which said political analytics firm Cambridge Analytica collected data on 50 million U.S. Facebook users without their consent.
"It seems some bullish investors wanted to cut their losses on the Taiex in a bid to make profit in futures Wednesday, when March contracts will be settled," he said.
After the Taiex fell below 11,000 points, bargain hunters jumped onto the trading floor, helping the market recoup earlier losses by the end of the session, Huang said.
Shares in TSMC, the most heavily weighted stock on the local market, fell 0.78 percent to close at NT$253.00, off an early low of NT$251.50, with 21.82 million shares changing hands.
iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 0.32 percent to end at NT$92.60 after hitting NT$92.40, while integrated circuit designer MediaTek Inc. rose 2.54 percent to close at NT$242.50 as smartphone demand in China showed signs of recovering.
Huang said select large cap old economy stocks rose, notably in the petrochemical sector, as some investors moved funds out of the tech sector to target fundamentally sound traditional industrial firms.
In the petrochemical sector, shares in Formosa Plastics Corp. gained 1.94 percent to close at NT$105.00, and Formosa Chemicals & Fibre Corp. added 0.91 percent to end at NT$110.50.
"Concerns over a possible trade war and worries over the rate hike cycle in the U.S. market still dictated market sentiment here," Huang said. "Lets see what happens later this week in terms of Washington's expected tariffs on China and the outcome of the Fed meeting."
Source: Focus Taiwan News Channel