Shares in Taiwan closed slightly lower Wednesday after moving in consolidation mode with many investors waiting for more clues about whether and how the U.S. Federal Reserve will adjust its monetary policy, dealers said.
Selling largely focused on the financial sector as investors locked in profits seen a session earlier, while select large-cap stocks, such as contract electronics maker Hon Hai Precision Industry Co. (??) and integrated circuit packaging and testing firm Advanced Semiconductor Engineering Inc. (ASE,???), moved higher to lend support to the broader market, they said.
The weighted index on the Taiwan Stock Exchange closed down 13.55 points, or 0.15 percent, at 9,017.38, after moving between 9,016.39 and 9.054.76, on turnover of NT$60.64 billion (US$1.91 billion).
The market opened up 0.14 percent and rose to the day's high in a knee-jerk reaction to the gains posted on Wall Street, where the Dow Jones Industrial rose 0.10 percent and the S&P 500 index added 0.20 percent overnight on a rebound staged by international crude oil prices, dealers said.
With the local index moving closer to 9,100 points, selling set in, largely focusing on financial stocks, to drag down the broader market into negative territory, while a resilient electronics sector helped the index from falling further by the end of the session, they said.
"Let us look into the details of the gains on Wall Street. The major indexes there, in fact, came off their earlier highs although they closed higher," Mega International Investment Services Corp. analyst Alex Huang said. "The movement showed investors' caution about the Fed's next move."
"After a couple of Fed officials voiced a hawkish stance on a rate hike earlier this week, investors worldwide have turned cautious. Taiwan's market movement simply reflected such a mood," Huang said. Fed Vice Chairman Stanley Fischer was one of the Fed officials to point out the need to raise interest rates.
Fed Chair Janet Yellen is scheduled to speak at the annual central bankers' meeting in Jackson Hole, Wyoming, on Friday.
"Before Yellen speaks to give some indications of the Fed's monetary policy, it is possible that such slow and boring movements in the local equity market will continue," Huang said.
The financial sub-index closed down 0.92 percent, led by Mega Financial Holding Co. (???), which fell 2.47 percent to end at NT$21.70 as prosecutors launched an investigation into an alleged money laundering case.
Mega International Commercial Bank , a flagship banking unit of Mega Financial, was slapped with a US$180 million fine by authorities of the State of New York after the bank's branch in New York was found to be violating the state's anti-money laundering laws.
Among other falling financial stocks, CTBC Financial Holding Co. (???) shed 1.90 percent to close at NT$18.10, and Fubon Financial Holding Co. (???) lost 0.60 percent to end at NT$41.55.
"Fortunately, the high-tech sector appeared resilient as investors picked up market laggards, such as Hon Hai (??), by taking advantage of their relatively low valuations," Huang said.
In the bellwether electronics sector, which closed up 0.07 percent, Hon Hai, an assembler of iPhones and iPads for Apple Inc., rose 1.05 percent to close at NT$86.70, and ASE gained 0.40 percent to end at NT$38.05.
However, Taiwan Semiconductor Manufacturing Co. (TSMC,), the most heavily weighted stock here, fell 0.29 percent to close at NT$173.50.
Source: Focus Taiwan