Taipei-Shares in Taiwan moved lower Friday as lingering concerns over trade friction between the United States and China offset the gains posted by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.
Although Washington and Beijing are set to resume high-level negotiations in the U.S. on Oct. 10, investors here took a wait-and-see attitude and lowered their stock holdings in favor of cash, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 42.31 points, or 0.39 percent, at 10,829.68, after moving between 10,827.61 and 10,921.17, on turnover of NT$121.61 billion (US$3.92 billion).
The market opened up 0.29 percent to exceed the 10,900-point mark on a technical rebound from a session earlier, when the Taiex edged lower, and moved to the day's high early in the morning, dealers said.
But the 0.30 percent fall in the Dow Jones Industrial Average overnight eventually took its toll, and selling pressure appeared across the board.
"There has been stiff technical resistance ahead of 10,900 points so investors simply seized the continued fears over global trade as an excuse to lock in profits," Hua Nan Securities Investment Management Chairman David Chu said.
"It was no surprise that the Taiex remained in consolidation mode as few investors believe Washington and Beijing will reach any deal in the upcoming talks. The trade dispute is expected to continue to affect U.S. and even global markets, including Taiwan," Chu said.
The silver lining Friday, dealers said, was that TSMC, the most heavily weighted stock in the local market, moved higher after IC Insights forecast its second half sales will be 32 percent higher than in the first half on strong demand for its advanced technology chips.
TSMC rose 1.49 percent to close at NT$272.00, after hitting an early high of NT$272.50, with 41.17 million shares changing hands.
The gains pushed TSMC's market capitalization to a new high of NT$7.05 trillion at the close, up from NT$6.94 trillion a day earlier.
"Without TSMC's upturn, the Taiex would have fallen another 40 points or so. The stock served to stabilize the broader market today," Chu said.
Also in the bellwether electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 1.08 percent to close at NT$73.20, and integrated circuit designer MediaTek Inc. fell 1.86 percent to end at NT$369.00.
Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.14 percent to close at NT$4,450.00.
Dynamic random access memory (DRAM) chipmakers faced pressure after U.S.-based counterpart Micron Technology Inc. reported a decline in earnings for the third quarter and predicted a disappointing fourth quarter, Chu said.
Among the falling DRAM stocks, Nanya Technology Corp. shed 4.51 percent to close at NT$80.50, and rival Winbond Electronics Inc. lost 1.65 percent to end at NT$17.85.
Chu said investors who were concerned about the global trade dispute also cut their holdings in old economy and financial shares.
Among the falling old economy stocks, Formosa Plastics Corp. shed 1.77 percent to close at NT$94.50, and Formosa Chemicals and Fibre Corp. lost 1.25 percent to end at NT$86.70 due to a weakening oil market hurt by concerns over global demand amid the trade dispute.
In the financial sector, which closed down 0.57 percent, Yuanta Financial Holding Co. dropped 1.07 percent to end at NT$18.50, and SinoPac Financial Holding Co. fell 1.63 percent to close at NT$12.10.
"Investors are wondering when foreign institutional investors will resume buying," Chu said. "Due to possible further volatility in the U.S. from the current trade friction, I expect foreign institutional investors will remain cautious."
According to the TWSE, foreign institutional investors sold a net NT$2.24 billion worth of shares on the main board Friday, the third straight session in which they were net sellers.
Source: Focus Taiwan News Channel