Taipei, Shares in Taiwan moved lower Wednesday as investors pocketed earlier gains amid renewed concern over trade friction between the United States and China after U.S. President Donald Trump said overnight that he was "not satisfied" with trade talks with China last week, dealers said.
Selling focused on large-cap stocks in both the electronics and non-high-tech sectors, which pushed down the broader market below the 10,900-point mark, while rotational buying lifted select biotech stocks, although their strength failed to return the main board into positive territory, the dealers said.
The weighted index on the Taiwan Stock Exchange, or Taiex, ended down 52.55 points, or 0.48 percent, at the day's low of 10,886.18, off an early high of 10,991.86, on turnover of NT$137.57 billion (US$4.60 billion).
The market opened up 0.38 percent and rose to the day's high before selling emerged to drag down share prices as investors took cues from a weakening Wall Street, where the Dow Jones Industrial Average closed down 0.72 percent and the S&P 500 index ended down 0.31 percent after Trump's comments, the dealers said.
"Trump's comments on the latest trade talks with China created uncertainty over trade ties between Washington and Beijing, prompting investors at home and abroad to sell for the moment," Ta Ching Securities analyst Andy Hsu said.
Over the weekend, the U.S. and China had agreed not to impose tariffs on each other's products and to continue talks to resolve their trade dispute, while putting a trade war on hold.
However, Trump said Tuesday that he was not happy with the negotiations with China, but described them as a start toward possible solutions to trade friction on both sides.
"So, Wall Street fell yesterday. It was no surprise that investors here simply seized the earlier gains today to take profits, as they had feared that as talks between Washington and Beijing proceed with uncertainty, global financial markets will suffer," Hsu said.
Hsu said Wednesday's selling, which escalated in the late trading session, put market heavyweights in the local equity market in the spotlight.
Among the falling large-cap stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, lost 0.22 percent to close at NT$228.50, off an early high of NT$231.50, with 23.04 million shares changing hands.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, fell 0.48 percent to end at NT$83.60 after hitting NT$84.70, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., lost 1.51 percent to close at NT$3,920.00, off an early high of NT$4,005.00.
Non-tech stocks appeared mixed, with Formosa Petrochemical Corp. down 2.40 percent to end at NT$122.00 and Formosa Plastics Corp. up 0.46 percent to close at NT$110.00.
Electronic component maker Yageo Corp. fell 9.34 percent to close at NT$883.00 after hitting NT$1,055.00 as investors locked in earlier gains resulting from a deal in which the company will acquire U.S.-based Pulse Electronics for US$740 million.
Bucking the downturn on the broader market, biotech stocks outperformed the Taiex, with TaiMed Biologics Inc. up 3.33 percent to close at NT$341.00, and Chlitina Holding Co. up 4.41 percent to end at NT$272.50.
"There have also been concerns about a higher U.S. dollar against the Taiwan dollar," Hsu said. "Many investors fear that the strength of the greenback will lead to a greater fund exodus from Taiwan."
"So, I do not think the Taiex will well close above the critical 11,000-point mark any time soon," he said.
Source: Focus Taiwan News Channel