Taipei, Shares in Taiwan closed lower Wednesday as investors locked in earlier gains, pushing the broader market into negative territory, amid lingering concerns that a stronger U.S. dollar will cause foreign investors to continue moving funds out of the region, dealers said.
While select "Apple concept stocks," led by smartphone camera lens supplier Largan Precision Co., moved up, selling in other major tech stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) pushed the main board down, they said.
The weighted index on the Taiwan Stock Exchange or the Taiex ended down 39.07 points, or 0.37 percent, at 10,618.81, after moving between 10,601.10 and 10,683.90, on turnover of NT$127.72 billion (US$4.30 billion).
The market opened up 7.64 points and soon rose to the day's high on the back of buying in certain Apple suppliers after the U.S. tech giant reported better than expected earnings for the January-March period, dealers said.
However, as the Taiex moved closer to the 10,700 mark, selling set in and accelerated in the late trading session, focusing on certain large cap stocks, in particular TSMC, which saw the market fall into negative territory by the end of the session, they said.
"Stiff technical resistance remained in place at around 10,700 points, so it was no surprise that selling emerged after the weighted index moved higher," Mega International Investment Services Corp. analyst Alex Huang said.
"More important, foreign investors continued to remit funds out of the region as the U.S. dollar gathers more steam in the global market, which led to more fund flight," Huang said.
The U.S. dollar index, which tracks the currencies of Washington's six major trading partners, rose to a four month high on Tuesday.
Huang said investors should pay close attention to comments made by the U.S. Federal Reserve after its two-day policymaking meeting scheduled to end later Wednesday for more clues about as to whether it plans to speed up the pace of interest rate increases, which is expected to dictate U.S. dollar movement.
Among the stocks suffering losses, TSMC, the most heavily weighted stock on the local market, fell 1.76 percent to close at NT$223.00 with 38.10 million shares changing hands, and shares in iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, shed 1.33 percent to end at NT$81.80.
Bucking the downturn on the broader market, shares in Largan, which lent support to the broader market and prevented further losses on the Taiex, rose 6.32 percent to close at 3,700.00, and Catcher Technology Co., a metal casing supplier to Apple, rose 0.60 percent to end at NT$333.00.
These Apple concept stocks gained after Apple reported overnight that its earnings per share for the three month period stood at US$2.73, compared with an earlier market expectation of US$2.67, while its revenue hit US$61.1 billion, beating an earlier market estimate of US$60.82 billion.
"However, Largan's strong showing failed to help the broader market sustain its earlier gains," Huang said.
In the old economy sector, performance was mixed Wednesday. Shares in Formosa Plastics Corp. rose 0.96 percent to close at NT$105.50, and Nan Ya Plastics Corp. gained 1.59 percent to end at NT$82.90, while Formosa Petrochemical Corp. fell 1.23 percent to close at NT$120.00.
According to the TWSE, foreign institutional investors sold a net NT$6.06 billion (US$204 million) worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel