Taipei-Shares in Taiwan closed marginally higher but returned to the 10,500-point mark Monday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) came under pressure to compromise the up upturn amid concerns over a cut in orders by Apple Inc., dealers said.
Despite the gains in the index, turnover was reduced amid lingering concerns over further foreign institutional selling in local equities before foreign investors head home for the upcoming Christmas holiday, the dealers said.
The weighted index on the Taiwan Stock Exchange ended up 15.08 points, or 0.14 percent, at 10,506.52, after moving between 10,472.39 and 10,526.41, on turnover of NT$94.14 billion (US$3.14 billion).
The market opened down 0.12 percent on follow-through selling from a session earlier as investors ignored a higher Wall Street, where the Dow Jones Industrial Average closed up 0.58 percent and the S&P 500 index ended up 0.90 percent Friday in hopes that a tax reform bill will be passed this week in Washington, the dealers said.
With the weighted index falling below 10,500 points, led by TSMC, some bargain hunters turned active to buy into other heavyweights such as smartphone camera lens supplier Largan Precision Co., as well as Formosa Plastics Corp., to help the broader market recoup its earlier losses and return to that level by the end of the session, they said.
"After recent significant gains in the weighted index, the valuation of the local main board remained high," Hua Nan Securities analyst Kevin Su said. "So any negative leads like the reported cut by Apple in orders to TSMC were amplified, pushing down the market before late-session buying emerged."
TSMC, the most heavily weighted stock in the local market, fell 1.30 percent to close at NT$227.00, with 14.54 million shares changing hands after the local media reported that the chipmaker has become the victim of weaker-than-expected demand for the premium iPhone X, as Apple has cut its orders to the Taiwanese firm by 30 percent for the first quarter of next year.
TSMC is believed to serve as the sole supplier of the A11 processor to the iPhone X, which went on global sale Nov. 3.
"Without a strong TSMC, it was unlikely for the broader market to make a breakthrough for the moment, and the main board remained in consolidation mode today," Su said.
TSMC's selling spread to other integrated circuit stocks, with IC packaging and testing services provider Advanced Semiconductor Engineering Inc. down 1.04 percent at NT$38.00, and smaller chipmaker United Microelectronics Corp. down 1.02 percent at NT$14.50.
Led by TSMC, the semiconductor sub-index closed down 0.93 percent.
Fortunately, Su said, other major Apple suppliers remained resilient amid bargain hunting, in particular Largan, which recovered from earlier losses.
Largan rose 2.99 percent to close at 4,305.00 after hitting a low of 4,070.00, while iPhone and iPad assembler Hon Hai Precision Industry Co. gained 0.11 percent to end at NT$93.60.
Su said select non-high-tech stocks moved higher, lending support to the broader market.
Among them, Formosa Plastics gained 1.50 percent to close at NT$94.70 and Formosa Chemicals & Fibre Corp. rose 3.04 percent to end at 98.30, while Fubon Financial Holding Co. added 0.80 percent to close at NT$50.60.
"Foreign institutional investors' attitudes still bothered local investors after recent selling. There are fears that foreign investors will keep dumping their holdings before the Christmas holiday," Su said.
"Therefore, it is possible that the weighted index will trade in a narrow range in the near term," Su added.
According to the TWSE, foreign institutional investors sold a net NT$126 million-worth of shares on the main board Monday after a net sell of NT$11.23 billion last week.
Source: Focus Taiwan News Channel