Taipei-Shares in Taiwan fell and closed below the 10,700-point mark on Monday after investors pocketed earlier gains amid lingering concerns over further volatility on Wall Street, dealers said.
Selling featured large-cap stocks in the bellwether electronics sector, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), while rotational buying in the non-high tech sector lent some support to the broader market, preventing the weighted index from falling further, they said.
The weighted index on the Taiwan Stock Exchange closed down 37.09 points, or 0.35 percent, at 10,664.55, after moving between 10,656.18 and 10,728.39, on turnover of NT$108.32 billion (US$3.60 billion).
The market opened up 5.15 points and rose to the day's high on follow-through buying from the previous session, but selling emerged at about 10 a.m. with market heavyweights in the high tech sector the focus, pushing the weighted index into negative territory, dealers said.
The weakness continued to the end of the session with the weighted index closing below 10,700 points, dealers added.
"Today's downturn came after the latest losses posted on Wall Street at the end of last week. The U.S. market still dictated the local main board on the back of their high correlation," Hua Nan Securities analyst Henry Miao said.
"There are concerns over possible further volatility on Wall Street since many local and overseas investors fear that tax reform in Washington might not clear the floor of the Senate by the end of this year," Miao said.
Facing concerns over the status of tax reform, the Dow Jones Industrial Average fell 100.12 points or 0.43 percent on Friday with the S&P 500 index down 0.26 percent.
Miao said TSMC, the most heavily weighted stock on the local market, led the downturn as investors rushed to cut liquid stocks like the chipmaker to keep cash at hand. TSMC fell 1.24 percent to close at NT$238.50 with 16.25 million shares changing hands.
Also in the bellwether electronics sector, which fell 0.79 percent, shares in iPhone and iPad assembler Hon Hai Precision Industry Co. (??) lost 1.42 percent to close at NT$104.00 and integrated circuit designer MediaTek Inc. (???) shed 2.88 percent to end at NT$320.00.
"Judging from the losses suffered by these large cap stocks, I think foreign institutional investors stood on the sell side today," Miao said.
According to the TWSE, foreign institutional investors sold a net NT$2.56 billion worth of shares on the main board Monday.
Bucking the downturn on the broader market, the financial sector closed up 0.66 percent on bargain hunting. Among the gaining financial stocks, Fubon Financial Holding Co. (???) rose 0.95 percent to end at NT$48.00 and Cathay Financial Holding Co. (???) gained 1.61 percent to close at NT$50.50.
"There is still strong technical resistance at about 10,700 points since the 20-day moving average is now at 10,739 points so I expect the weighted index to consolidate for some time before moving well above that level," Miao said.
Source: Focus Taiwan News Channel