Taipei-Shares in Taiwan closed lower Friday as many Taiwanese suppliers to Apple Inc. came under pressure, led by smartphone camera lens maker Largan Precision Co. amid renewed concerns over sales of the premium iPhone X, dealers said.
The financial sector also moved lower, adding pressure to the broader market during the trading session before some bargain hunters turned active in the late trading session to cap the downturn by the end of the session, the dealers said.
The weighted index on the Taiwan Stock Exchange ended down 46.57 points, or 0.44 percent, at 10,491.44, after moving between 10,436.11 and 10,520.66, on turnover of NT$124.84 billion (US$4.16 billion).
The market opened down 0.20 percent in reflection of a falling Wall Street, where the Dow Jones Industrial Average closed down 0.31 percent and the S&P 500 index ended 0.41 percent lower overnight amid concerns over the passage of a tax overhaul bill in the U.S. Senate after a Republican senator said he will vote against the bill in an upcoming vote. The Republicans have a small margin over the Democrats in the Senate, the dealers said.
Selling in the local electronics sector escalated, with Largan and other Apple suppliers pushing down the broader market, but with the weighted index moving closer to the nearest technical support level ahead of 10,400 points, bargain hunting emerged to help the main board recover part of its earlier losses by the close of the session, they said.
"Wall Street still dictated the local equity market today, as investors were bothered by a massive tax reform bill in the U.S.," KGI Securities analyst Phil Chu said.
"Although I remain upbeat about the passage of the bill, I understand that investors simply seized the worry as a cause to lock in their recent gains for the moment," he said.
"The bellwether electronics sector fell, as Largan faced selling, with investors refocusing on the company's unsatisfactory sales for November and its caution about its December figure, which dragged down other Apple concept stocks," Chu said.
Largan, the most expensive stock in the local market, fell 2.79 percent to close at NT$4,180.00 after hitting a low of NT$4,100.00.
The company's consolidated sales for November rose only 0.05 percent from a month earlier to NT$5.62 billion, despite the debut of the iPhone X, and it has also said that its December sales could stay little changed from November.
Among other Taiwanese suppliers to Apple, Hon Hai Precision Industry Co., an assembler of iPhones and iPads, lost 1.48 percent to close at the day's low of NT$93.50.
In the financial sector, which closed down 0.66 percent to add pressure to the broader market, Fubon Financial Holding Co. fell 0.99 percent to end at NT$50.20, and Cathay Financial Holding Co. lost 1.10 percent to close at NT$53.70, while Mega Financial Holding Co. gained 0.42 percent to end at NT$23.70.
"Fortunately, some investors were willing to pick up bargains as the weighted index moved lower and closer to 10,400 points. I expected strong technical support ahead of that level," Chu said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, was one of the beneficiaries of bargain hunting and kept the broader market from falling further, Chu said.
Off an early low of NT$226.50, TSMC lost 0.22 percent to close at NT$230.00, with 42.61 million shares changing hands.
Chu said that Friday's losses also reflected lingering concerns over foreign institutional investors' attitudes toward local shares.
"I expected foreign institutional investors to continue to pocket their earlier gains before they head back home for the upcoming Christmas holiday," Chu said.
According to the TWSE, foreign institutional investors sold a net NT$4.28 billion-worth of shares on the main board Friday.
Source: Focus Taiwan News Channel