Taipei--Shares in Taiwan closed slightly lower Tuesday as investors locked in gains from the previous day, when the weighted index closed at a 27-year high, dealers said.
While many stocks, in particular medium and small cap issues, came under selling pressure to push the broader market lower, contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) posted gains to prevent a steeper decline, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed down 10.41 points, or 0.10 percent, at 10,568.97, after moving between 10,533.72 and 10,619.42, on turnover of NT$132.96 billion (US$4.40 billion).
The market opened up 0.18 percent and moved to the day's high 15 minutes later, but selling focused on second-tier electronics stocks emerged after the index breached 10,600, quickly sending the broader market into negative territory, dealers said.
The weakness continued to the end of the session.
"After the main board closed at a 27-year high yesterday, some investors rushed to pocket their gains today," Concord Securities analyst Kerry Huang said.
"There were some concerns over foreign institutional investors' strategies since they were net sellers Monday despite the market closing higher."
On Monday, the weighted index closed at 10,579.38, the highest closing level since finishing at 10,907.09 on April 4, 1990, but foreign institutional investors sold a net NT$523 million in shares.
"It seemed that some technical hurdles appeared ahead of the 10,600-point level and the main board simply took a pause, but the downward pressure was not too strong," Huang said, referring to the small drop in the weighted index Tuesday.
Among the falling smaller cap high-tech stocks, smartphone camera lens maker Asia Optical Co. (??) fell 5.85 percent to close at NT$88.50, and rival Genius Electronic Optical Co. (???) shed 4.70 percent to end at NT$354.30 as investors cashed in on the stocks' recent sizable upturns.
Also affected were touch panel maker General Interface Solution (GIS) Holding Ltd. (??), which plunged 9.34 percent to close at NT$310.50, and rival TPK Holding Inc. (??), which fell 2.39 percent to end at NT$122.50.
"The silver lining was that TSMC, the most heavily weighted stock, continued to move higher, helping the broader market fend off downward pressure," Huang said.
TSMC, the world's largest contract chip maker, rose 0.69 percent to close at NT$217.50, returning to its level before it went ex-dividend, (when its stock price was cut by the amount of the cash dividend per share issued to shareholders) on June 26.
The reference price of TSMC stock was lowered to NT$210 per share at the start of trading on June 26, from the previous day's close of NT$217, reflecting the NT$7 cash dividend the company paid out.
Unlike TSMC, other large-cap stocks came under pressure after a rise seen a session earlier, dealers said.
Among them, Hon Hai Precision Industry Co. (??), an iPhones and iPad assembler, fell 0.41 percent to close at NT$121.00, and Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., lost 0.79 percent to end at NT$5,650.00.
In the non-high-tech sector, China Steel Corp. (??), the largest steel maker in Taiwan, fell 0.39 percent to close at NT$25.30, while Formosa Plastics Corp. (??) rose 0.22 percent to end at NT$93.20, and Cathay Financial Holding Co. (???) gained 0.81 percent to close at NT$49.55.
According to the TWSE, foreign institutional investors sold a net NT$783 million in shares on the main board Tuesday.
Source: Focus Taiwan News Channel