Taiwan shares fell more than 100 points in the morning session Friday, led by "Apple concept stocks", after the latest iPhone models unveiled by Apple Inc. a day earlier failed to impress the market, which pushed down the share price of the U.S. consumer electronics brand overnight, dealers said.
The current selling also dragged down large-cap stocks amid disappointment with a decision by the European Central Bank (ECB) on Thursday not to pump more funds into the market, they said. The ECB has also left its key interest rates unchanged.
As of 10:50 a.m., the weighted index on the Taiwan Stock Exchange had fallen 104.65 points, or 1.13 percent, to 9,158.24 on turnover of NT$36.13 billion (US$1.15 billion).
"An upgrade of the new iPhones' specifications had been widely anticipated by the market ahead of the launch," KGI Securities analyst Phil Chu said. "That's why Apple shares plunged overnight, prompting investors here to dump major Taiwanese suppliers to the U.S. firm this morning."
Apple shares plunged 2.62 percent on Wall Street overnight despite the launch of the 4.7-inch iPhone 7 and the 5.5-inch iPhone 7 Plus a day earlier. The iPhone 7 and iPhone 7 Plus are water resistant and have more sophisticated cameras than previous models. For the larger model, the iPhone 7 Plus is equipped with dual camera lenses that have two side-by-side 12-megapixel sensors.
But, the market has feared that the new iPhones will not help Apple's sales very much since it failed to bring a surprise to consumers. Apple has also announced it would not release the first weekend iPhone sales numbers after the new gadget's global sales kick off on Sept. 16, a move which has departed from the firm's past practices and raised concerns over sales results.
Among the falling Apple concept stocks in Taiwan, Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, had fallen 1.02 percent to NT$77.70, and Largan Precision Co. (???), a smartphone camera lens supplier, had shed 2.58 percent to NT$3,590.00 as of 10:50 a.m.
In addition, "the ECB disappointed the market by simply maintaining its current asset purchasing program and leaving interest rates unchanged and the decision pushed down Wall Street and some major European markets overnight. Now the Taiwan market just followed suit," Chu said.
Chu said that downward pressure on market heavyweights, such as Taiwan Semiconductor Manufacturing Co. (TSMC,???), sent the broader market even lower in the morning session. Contract chip maker TSMC, the most heavily weighted stock in the local market, had dropped 1.64 percent to NT$180.00 as of 10:50 a.m.
"Foreign institutional investors cut the number of their long position contracts in the futures market yesterday, which left many investors feeling worried," Chu said. According to Chu, foreign investors lowered the number of net long position futures contracts by more than 7,000 Thursday.
"Judging from the losses suffered by large-cap stocks, I think the current selling largely came from foreign institutional investors," Chu said.
Chu said that after the dive, the local main board is expected to find some technical support at a range between 9,100 to 9,150 points.
Source: Focus Taiwan News Channel