Taiwan shares drop by 0.54 percent

Taipei, Shares in Taiwan dropped 0.54 percent but remained above 10,000 points Tuesday, retreating from an upturn of about 250 points seen a day earlier as the United States and China reached a temporary truce in their trade conflict.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, closed down 54.33 points, or 0.54 percent, at 10,083.54, on turnover of NT$143.54 billion (US$5.42 billion).

The local market opened down 17.44 points at 10,120.43 on a mild technical correction from a session earlier and then moved between 10,061.70 and 10,126.02 before the close.

All major stock categories lost ground, with the cement sector losing the most at 1.55 percent, followed by textile stocks, which fell 1.19 percent.

In the bellwether electronics sector, stocks of Taiwanese companies in Apple Inc.'s supply chain came under pressure, with Taiwan Semiconductor Manufacturing Co. (TSMC), which provides processors for iPhone production and is the most heavily weighted stock in Taiwan, fell 0.43 percent to NT$234.00.

Meanwhile, iPhone assembler Hon Hai Precision Industry Co., closed down 0.81 percent to end at NT$73.40, and Largan Precision Co., a major supplier of smartphone camera lenses to Apple, dropped 5.53 percent to end at NT$3,500.00.

Largan's fall spread to other companies in the optoelectronic components sector, which dropped 2.24 percent.

In the old-economy sector, automobile stocks outperformed others, with two companies affiliated with Taiwan's biggest automaker, Yulon Group, moving higher after concerns were eased over the death of Yulon Group Chairman Kenneth Yen (???) Monday.

Shares of Yulon Motor Co. rose 9.89 percent to end at NT$20.00 and China Motor Corp. ended 1.26 percent higher at NT$24.20.

Analysts said the local equity market is expected to surge in the short term but its performance in the mid-to-long-term will depend on the outcome of trade negotiations between the U.S. and China during a 90-day trade tariff ceasefire that began Dec. 1.

If the Taiex remains above 10,014 points -- a previous high recorded Nov. 8 -- in the mid term, the index is expected to hover above the 10,000-point mark, Boryi Chien (???), a manager at Cathay Securities Co., said, adding that further developments in U.S.-China trade tension and the movement of foreign institutional investors will continue to be key factors impacting the performance of the local bourse.

According to the TWSE, foreign institutional investors sold a net NT$3.73 billion-worth of shares on the main board Tuesday.

Source: Focus Taiwan News Channel