Taipei, Shares in Taiwan closed little changed Friday after recouping most of their earlier losses caused by growing trade friction between the United States and China, dealers said.
Bargain hunters emerged in the afternoon trading session to pick up select large cap stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), helping the broader market recover by the end of the session, they said.
In addition to concerns over U.S.-China trade relations, dealers said, local investors also remained cautious ahead of the July 10 deadline for listed firms to release their June sales reports, they added.
The weighted index on the Taiwan Stock Exchange or the Taiex ended down 3.24 points, or 0.03 percent, at 10,608.57, after moving between 10,523.58 and 10,665.72, on turnover of NT$158.77 billion (US$5.20 billion).
The market opened up 0.31 percent and rose to the day's high on a technical rebound from the earlier session, when the Taiex closed down 1.03 percent, as local investors took their cue from gains posted on Wall Street, where the Dow Jones Industrial Average ended up 0.75 percent overnight, dealers said.
With the Taiex breaching 10,600 points at one point, selling set in pushing the main board down to the day's low at around 11 a.m. before bargain hunters turned active in the late trading session, helping the Taiex come off its earlier low and end little changed, they said.
At about noon, Washington started to impose tariffs on US$34 billion worth of Chinese goods as previously indicated and an additional US$16 billion worth of tariffs are in the pipeline.
China responded immediately by imposing retaliatory tariffs on US$34 billion worth of imports from the U.S., and US$16 billion worth of additional duties are pending.
"The trade war starts as the market had widely anticipated," Mega International Investment Services Corp. analyst Alex Huang said. "Such negative external factors continued to weigh on market sentiment here."
"Fortunately, after the Taiex fell below the 10,600 point mark in the morning session, some investors appeared willing to buy at lows by picking up the most important stock TSMC to bolster the broader market," Huang said.
Shares in TSMC, the most heavily weighted stock on the local market, rose 1.17 percent to close at NT$217.00, off a low of NT$215.00, with 29.01 million shares changing hands. Huang said a stronger TSMC, which led the bellwether electronics sector to close up 0.52 percent, served as an anchor stabilizing the main board on Friday.
Also in the electronics sector, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 1.43 percent to end at NT$4,605.00 after the company reported better-than-expected sales for June a day earlier.
iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, fell 0.86 percent to close at NT$80.50, but came off an early low of NT$80.20.
Outperforming the broader market, silicon wafer makers attracted buying on the back of rising product prices, with shares in Formosa Sumco Technology Corp. up 10 percent, the maximum daily increase, to close at NT$136.00.
Fears over a trade war between Washington and Beijing took a toll on old economy stocks, dealers said. Among the falling non-high tech stocks, Formosa Plastics Corp. lost 3.52 percent to close at NT$109.50, Formosa Chemicals & Fibre Corp., shed 3.00 percent to end at NT$113.00, and Nan Ya Plastics Corp. fell 1.02 percent to close at NT$87.10.
"Judging from today's fluctuations, I think the main board saw strong technical support at around 10,500 points," Huang said. "But, even if the Taiex stages a rebound, the room for an upturn could be limited as investors are watching carefully how listed companies report their June sales."
Huang said another focal point is a TSMC investor conference on July 19, which will release second quarter results and provide third quarter guidance and could move the market.
Source: Focus Taiwan News Channel