Shares on the Taiwan Stock Exchange (TWSE) closed lower on Tuesday as investors took advantage of earlier gains to cut their holdings for profits, with the weighted index breaching the 9,300 point mark at one point, dealers said.
Market sentiment turned cautious with earnings season at home and Wall Street fast approaching. As a result, many investors preferred to pocket gains now in a bid to avoid potential losses following the earnings reports, they added.
The weighted index on the TWSE ended the day down 45.99 points, or 0.5 percent, at 9,219.82, after moving between 9,167.72 and 9,327.71, on turnover of NT$88.17 billion (US$2.78 billion).
The market opened up 0.50 percent to go above 9,300 points, the index rising as local investors took their cue from a higher Wall Street, where the Dow Jones Industrial Average closed up 0.49 percent and the S&P 500 index ended 0.46 higher overnight, largely on the back of rising international crude oil prices, dealers said.
Stiff technical resistance became clearer after the weighted index passed 9,300 points, pushing the index below the previous day's closing level. Selling focused on select large cap stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, which drove the earlier upturn, they said.
"TSMC has scheduled an investor conference for Thursday," Mega International Investment Services Corp. analyst Alex Huang said. "Investors remain wary about what guidance TSMC will give for the fourth quarter, although the chip maker posted a new high in sales for the third quarter."
Shares in TSMC, the world's largest contract chip maker, fell 0.27 percent to close at NT$187.50, off an early high of NT$191.00, with 30.27 million shares changing hands.
The chip maker's consolidated sales for the third quarter totaled NT$260.41 billion, up 17.4 percent from the second quarter. Third-quarter sales also beat the company's earlier guidance of between NT$254 billion and NT$257 billion.
Shares in Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., shed 2.39 percent to close at NT$3,680.00, after coming off an early high of NT$3,815.00. Largan, the most expensive stock in Taiwan, is also scheduled to hold an investor conference on Thursday.
Bucking the downturn on the broader market, shares in Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads for Apple, rose 1.38 percent to close at NT$81.10. The gains posted by Hon Hai, the second most heavily weighted stock on the Taiwan Stock Exchange, prevented the broader market from falling further at the close, dealers said.
"Since the Taiwan dollar has appreciated against the U.S. dollar, there are worries that the local export-oriented high tech sector will report foreign exchange losses for the third quarter," Huang said. In the third quarter, the Taiwan dollar rose 2.85 percent against the U.S. dollar.
In the financial sector, which ended the day down 0.28 percent, shares in E. Sun Financial Holding Co. (???) lost 0.83 percent to close at NT$18.00 and shares in Cathay Financial Holding Co. (???) fell 0.37 percent to close at NT$40.00.
"The main board could go under 9,200 points in the near term, but I expect technical support to come into play at about 9,100 points," Huang said.
Source: Focus Taiwan News Channel