Taipei--Shares in Taiwan fell slightly on Tuesday, reflecting a lackluster performance on Wall Street overnight, but the index remained above the 10,200 point level, dealers said.
Many large cap stocks in both the electronics and non-high tech sectors fell into consolidation mode after a rally the previous session amid cautious sentiment, with many investors waiting for the release of sales data for May by listed companies due before June 10, they said.
The weighted index on the Taiwan Stock Exchange closed down 20.66 points, or 0.20 percent, at 10,206.18, after moving between 10,190.39 and 10,221.64, on turnover of NT$85.88 billion (US$2.86 billion). Tuesday's turnover was shy of Monday's NT$93.90 billion.
The market opened down 0.13 percent in response to a weakening Wall Street, where the Dow Jones Industrial Average fell 0.10 percent and the S&P 500 index dropped 0.12 percent overnight due to a pullback in international crude oil prices, dealers said.
With selling in select market heavyweights such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and smartphone camera lens supplier Largan Precision Co. (???), the local index fell briefly below 10,200 before bargain hunters pushed the index back up by the end of the session, they said.
"Since the market closed above 10,200 points yesterday, investors have been divided about the future movement of the index," KGI Securities analyst Phil Chu said. "Many of them prefer to pause for a moment and simply watch, which was why the main board pulled back slightly today."
"Fortunately, the market remained awash in liquidity, making share prices resilient. But, I expect the nearest technical support at around 10,100 points," Chu said, suggesting that the index could move lower before there is more support.
Due to the reduced turnover, many large cap stocks remained in the doldrums, which limited the movement of the entire market throughout the session, Chu said.
Shares in TSMC, the most heavily weighted stock in the local market, fell 0.71 percent to close at NT$210.50. The stock rallied 1.44 percent on Monday and was the most important driver of gains in the weighted index.
"Without a stronger TSMC as well as the upturn of other high-tech giants, it was no surprise that the main board failed to steam ahead further," Chu said. "The bellwether electronics sector still dictated the broader market."
Also in the high-tech sector, shares in Largan, the most expensive stock in Taiwan, lost 1.24 percent to close at 4,790.00, while the smartphone camera lens maker posted a 2 percent month-on-month increase and a 12 percent year-on-year rise in sales for May.
Bucking the downturn of the broader market, Catcher Technology Co. (??), a metal casing supplier, gained 4.42 percent to close at NT$354.00 after reporting a day earlier that sales for May rose 18.5 percent from a month earlier to NT$6.08 billion, the highest monthly figure so far this year.
In the old economy sector, Asia Cement Corp. (??) lost 1.08 percent to close at NT$27.50, while food brand Uni-President Enterprises Corp. (??) remained resilient, ending the day unchanged at NT$59.50 on hope of increased beverage sales during the summer.
"The lower turnover also showed that many investors are hesitant to rush onto the trading floor before gathering all the sales data for May," Chu said. "Without trading volume topping NT$90 billion and even NT$100 billion, local shares are unlikely to rise much."
Source: Focus Taiwan News Channel