Taipei, Sept. 25 (CNA) Shares in Taiwan closed flat on Tuesday after moving in a narrow range throughout the session amid worry over a possible pullback ahead of the stiff technical resistance barrier of 11,000 points, dealers said.
Market sentiment also remained haunted by concerns over the escalating trade war between the United States and China after Beijing last week withdrew from negotiations with Washington, dealers said.
Selling focused on old economy stocks, in particular in the petrochemical sector, which had been driving the broader market higher in recent sessions, dealers said.
However, they said, the main board was propped up by buying in some tech firms, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market.
The weighted index on the Taiwan Stock Exchange (Taiex) ended down 6.44 points, or 0.06 percent, at 10,978.85, after moving between 10,941.77 and 11,003.49. Turnover totaled NT$113.72 billion (US$3.70 billion) during the session.
The market opened down 0.12 percent in a knee-jerk reaction to a drop on Wall Street, where the Dow Jones Industrial Average fell 0.68 percent and the S&P 500 index lost 0.35 percent Monday, dealers said.
The Taiex continued to move in narrow seesawing trade for the rest of the session, as selling emerged after the index breached 11,000 points, and the main board closed below that level, dealers added.
"There are high technical hurdles ahead of 11,000 points so many investors are reluctant to chase prices at the moment," Mega International Investment Services Corp. analyst Alex Huang said.
He noted that the turnover was down compared with NT$159.61 billion on Friday, which was the previous trading day as the local financial market was closed on Monday for the Mid-Autumn Festival holiday.
Huang said investors were also wary because of the U.S.-China trade issue.
"The two sides are unlikely to resolve their trade problems soon, as China has decided to walk away from the trade negotiations," he said.
Thanks to TSMC and other major tech stocks, however, the main board ended slightly above the previous closing level, Huang said.
TSMC gained 0.76 percent to close at NT$263.50, with 24.32 million shares changing hands after a foreign brokerage listed the firm as a defensive stock, while iPhone assembler Hon Hai Precision Industry Co. added 0.40 percent to end at NT$76.10.
Led by TSMC, the bellwether electronics sector closed up 0.40 percent and the semiconductor sub-index ended up 0.73 percent.
"Investors simply locked in their recent gains in the petrochemical sector, seizing on the China-U.S. trade issue as an excuse to dump petrochemical stocks," Huang said.
Among the falling petrochemical stocks, Formosa Petrochemical Corp., second only to TSMC in terms of market value, shed 3.40 percent to close at NT$142.00, Formosa Plastics Corp. lost 1.70 percent to end at NT$115.50, Nan Ya Plastics Corp. fell 1.17 percent to close at NT$84.50, and Formosa Chemicals & Fibre Corp. ended 1.17 percent lower at NT$126.50.
In the financial sector, which outperformed the broader market by closing up 0.17 percent, Mega Financial Holding Co. rose 0.55 percent to end at NT$27.30, and CTBC Financial Holding Co. gained 0.67 percent to finish at NT$22.60.
Huang said investors should also pay attention to the policymaking meeting of the U.S. Federal Reserve, which was scheduled to start later in the day.
"The global financial markets have been nervous about the Fed's interest rate cycle next year and the meeting will give some clues," he said.
According to Taiex data, foreign institutional investors bought a net NT$4.73 billion worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel