Taipei, June 8 (CNA) Shares in Taiwan took a beating Friday with the bellwether electronics sector in focus, pushing down the benchmark index to a level close to the nearest technical support of around 11,100 points, dealers said.
Following the losses suffered by the tech-heavy Nasdaq index, investors rushed to dump large cap electronics stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co., dealers added.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed down 95.33 points, or 0.85 percent, at 11,156.42, after moving between 11,122.98 and 11,243.59, on turnover of NT$161.01 (US$5.41 billion).
Friday's closing level was below the 5-day moving average of about 11,160 points.
The market opened down 8.16 points and stayed below the previous closing level as the electronics sector remained in the doldrums in the wake of the falling Nasdaq index, which fell 0.70 percent overnight, dealers said.
Selling became more pronounced in the afternoon session, pushing the Taiex down by more than 100 points at one point, led by TSMC, Hon Hai and other tech stocks, before bargain hunters emerged in the late trading session to recoup some of the losses by the end of the day, they said.
"After yesterday's gains when the local main board moved closer to the intraday high of 11,270 points (seen on Jan. 23), many investors turned cautious about an immediate possible major pullback," KGI Securities analyst Phil Chu said.
"In particular, after witnessing the Nasdaq index weaken overnight, local investors scrambled to cut their holdings in large cap electronics and retain as much cash as possible in a bid to avoid further possible losses down the road," Chu said, adding "I think foreign institutional investors stood on the sell side."
According to the TWSE, foreign institutional investors sold a net NT$3.92 billion worth of shares on the main board Friday.
TSMC, the most heavily weighted stock on the local market, fell 1.30 percent to close at NT$227.00 with 23.52 million shares changing hands. Led by TSMC, the bellwether electronics sector ended down 1.18 percent.
Among other falling tech heavyweights, Hon Hai, second to TSMC in terms of market value, shed 3.18 percent to close at NT$88.30, although its subsidiary Foxconn Industrial Internet Co. Ltd. (FII) made a strong showing on the first day of its listing on the Shanghai Stock Exchange.
"It is possible for foreign investors to sell Hon Hai to buy FII today," Chu said.
Also in the electronics sector, shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., lost 2.15 percent to close at NT$4,545.00, while Pegatron Corp., another iPhone assembler, rose 0.15 percent to end at NT$67.90 on reports that it will secure orders to assemble new larger-LCD screen iPhones.
Chu said selling spread to non-high tech stocks though the financial sector remained resilient, falling only 0.27 percent.
Cathay Financial Holding Co., one of the leading financial holding firms in Taiwan, ended unchanged at NT$55.00 after the firm reported an almost 70 percent year-on-year increase in net profit for the first five months of this year.
In the old economy sector, shares in Nan Ya Plastics Corp. fell 1.61 percent to close at NT$108.50, Formosa Plastics Corp. lost 1.36 percent to end at NT$85.50, and food brand Uni-President Enterprises Corp. dropped 0.66 percent to close at NT$75.0.
"Since the Taiex fell below the five-day moving average today, it needs time to digest downward pressure and consolidate," Chu said.
Source: Focus Taiwan News Channel