Taipei-Shares in Taiwan closed lower Tuesday after investors locked in earlier gains on the back of a higher Wall Street overnight, dealers said.
Market sentiment remains uncertain over foreign institutional investors' attitude to the local equity market after a focus on selling in recent sessions, with worries that large cap tech stocks could suffer further losses prompting investors to take profit, they said.
The weighted index on the Taiwan Stock Exchange closed down 29.81 points, or 0.28 percent, at 10,443.28, after moving between 10,408.06 and 10,495.24, on turnover of NT$106.07 billion (US$3.54 billion).
The market opened up 0.15 percent on follow-through buying from the previous session and moved to the day's high in the wake of a 0.23 percent increase in the Dow Jones Industrial Average and a 0.32 percent rise in the S&P 500 index on Monday, dealers said.
However, as the weighted index approaching the 10,500 point level, selling set in, placing the bellwether electronics sector in the spotlight and pushing the broader market into negative territory at about 9:30 a.m., and that weakness continued until the end of the session, they said.
"The main board rose yesterday but foreign institutional investors still stood on the sell side, which has bothered many local investors," Concord Securities analyst Kerry Huang said.
The weighted index closed up 0.72 percent on Monday, when foreign institutional investors sold a net NT$3.78 billion worth of shares. On Tuesday, foreign institutional investors recorded further net sales of NT$4.91 billion, according to the TWSE.
"Amid fears of further selling by foreign institutional investors, many local investors took profit right after share prices bounced back," Huang said. "I expect foreign institutional investors will continue to cut their holdings before stepping away from the trading floor for the Christmas holiday."
Huang said the highly liquid electronics sector fell victim to foreign institutional selling, falling 0.48 percent and that led to the downturn of the broader market.
Shares in Hon Hai Precision Industry Co., an assembler of iPhones and iPads, lost 1.98 percent to close at NT$94.10, and Pegatron Corp., which reported a 26.8 percent month-on-month decline in November sales, shed 2.70 percent to end at NT$68.60.
"The silver lining was that Taiwan Semiconductor Manufacturing Co. (TSMC) recovered from its earlier losses to prevent the broader market from falling further by the end of the session," Huang said.
Contract chipmaker TSMC, the most heavily weighted stock in the local market, ended unchanged at NT$227.50, off an early low of NT$225.00, with 21.78 million shares changing hands.
Also in the electronics sector, Largan Precision Co., a smartphone camera lens supplier to Apple Inc. benefited from late trading session bargain hunting to close at NT$4,430.00 after hitting a low of NT$4,275.00.
In the non-high tech sector, which saw some rotational buying, shares in Formosa Plastics Corp. gained 0.43 percent to close at NT$93.30 and Formosa Chemicals & Fibre Corp. rose 0.53 percent to end at NT$94.30. CTBC Financial Holding Co. added 0.25 percent to close at NT$20.25.
In addition to concerns over foreign selling, Huang said, Tuesday's moderate turnover also reflected caution ahead of policymaking meetings scheduled by several major central banks, including the U.S. Federal Reserve, for later in the week.
"The good thing was that such turnover indicated selling was not very heavy," Huang said.
Source: Focus Taiwan News Channel