Taipei--Shares in Taiwan dropped below the 9,700 points on Wednesday amid concern over a possible interest rate hike in the United States later this month, dealers said.
The weighted index on the Taiwan Stock Exchange opened up 0.65 points on Wednesday at 9,751.12 before trading in a narrow range. That reflected the mixed signals sent by President Donald Trump's proposed income tax cuts and infrastructure spending, as well as his proposal for a "merit-based system" for immigration, during his speech to Congress on Tuesday.
The index closed down 75.69 points, or 0.78 percent, at 9,674.78, after moving between 9,758.78 and 9,674.78, on turnover of NT$98.1 billion (US$3.2 billion).
The market was in consolidation mode amid cautious investor sentiment over a possible U.S. interest rate hike as traders forecast a slightly more than 50 percent chance the Federal Reserve will raise interest rates at its two-day meeting which ends on March 15.
Ultimately, the market's weighted index fell short of the 9,700-point mark due mainly to weakness in electronics and financial stocks, with the financial sector shedding 0.29 percent.
Shares in contract chip maker Taiwan Semiconductor Co. (TSMC, ???), the most heavily weighted stock on Taiwan's market, fell 1.59 percent to close at NT$186, while Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, closed 0.56 percent down at NT$89.
Shares in Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., lost 1.86 percent to finish at NT$4,475.
The old-economy sector outperformed others, with cement, paper and pulp, foodstuffs and steel stocks all posting gains.
Kevin Lin (???), vice president of investment consultant firm Caizischool Co., said recent gains in Taiwan shares were largely the result of aggressive buying by overseas Taiwanese businesses as they move funds back to Taiwan with foreign institutional investors rushing to move funds out the region as they seek more profitable markets.
Given that the Taiwan main board pulled back on hitting a high of 9,869 points in mid-February, the main index is likely to challenge the 10,000-point mark before mid-April when companies give their first-quarter 2017 financial results, Lin said.
The scenario is likely to be similar to that in late April 2015 when the local stock market reached 10,014 points before falling back, Lin added.
Source: Focus Taiwan News Channel