Taipei, Shares in Taiwan closed lower on thin turnover Friday amid renewed concerns over trade friction between the United States and China after the two top economies failed to make a breakthrough to resolve their issues during the latest two-day negotiations, dealers said.
Investor sentiment was cautious because investors here have feared that Wall Street will encounter more volatility because of the legal troubles faced by U.S. President Donald Trump, which have created uncertainty in the U.S. and is likely to affect the global financial markets, the dealers said.
Selling was seen across the board in the local equity market, while many investors preferred to stay on the sidelines, sending trading volume down below the NT$100 billion (US$3.25 billion)-mark, they added.
The weighted index on the Taiwan Stock Exchange (TWSE) or Taiex closed down 53.78 points, or 0.50 percent, at 10,809.35, after moving between 10,770.32 and 10,865.91, on turnover of NT$96.25 billion.
The market opened up 2.78 points and rose slightly to the day's high on follow-through buying from a session earlier, when the local main board ended up 0.55 percent, but selling in large-cap stocks in both the electronics and non-high tech sectors emerged to push down the Taiex into negative territory, the dealers said. The weakness continued into the end of the session.
The highly anticipated two-day trade talks between U.S. and China ended Thursday without producing any major results, while both sides went ahead to kick off a second round of raising tariffs on US$16 billion-worth of each side's merchandise.
"Trade issues between the U.S. and China still bothered investors here, in particular after the two countries ended their two-day talks without any breakthrough Thursday," Taihsin Securities Investment Consulting analyst Tony Huang said.
"Many investors are afraid that if the trade dispute spins out of control, the global economy is expected to be hurt, with demand likely to slow down," Huang said. "Financial markets do not like any uncertainty like this so investors simply locked in the gains built a day earlier or just sat idle today."
Huang said selling affected many market heavyweights, with contract chipmaker Taiwan Semiconductor Manufacturing Co., the most heavily weighted stock in the local market, down 0.41 percent to close at NT$243.50, with 14.34 million shares changing hands.
Also in the bellwether electronics sector, iPhone assembler Hon Hai Precision Industry Co, second to TSMC in terms of market value, lost 0.86 percent to close at NT$81.10, and ASE Technology Holding Co., the world's largest integrated circuit packaging and test services provider, shed 0.81 percent to close at NT$73.30.
In the old economy sector, the textile sector, which fell 2.09 percent as investors pocketed their recent gains, Far Eastern New Century Corp. lost 3.36 percent to close at NT$36.00, and Eclat Textile Co. fell 3.47 percent to end at NT$375.00.
Appearing resilient after the recent downturn, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 0.45 percent to close at NT$4,505.00. In addition, contract notebook computer maker Compal Electronics Co. rose 2.14 percent to end at NT$19.05.
Also bucking the downturn on the broader market, Formosa Petrochemical Corp. added 1.60 percent to close at NT$127.00, and Cathay Financial Holding Co. added 0.59 percent to end at NT$52.80.
"However, they were among the few stocks that moved higher, which was not strong enough to reverse the overall fall in the Taiex," Huang said.
"How the main board will move will depend on external factors such as U.S.-China trade friction," Huang said. "In addition, the legal issues faced by Trump are also a concern."
Trump's former personal lawyer Michael Cohen has pleaded guilty to eight counts related to tax fraud, campaign contributions, making false statements to a financial institution and unlawful corporate contributions. In addition, Cohen also admitted to making payments to two women under instructions from Trump.
According to the TWSE, foreign institutional investors sold a net NT$2.27 billion-worth of shares on the main board Friday.
Source: Focus Taiwan News Channel