Taiwan shares end slightly higher; TSMC falls but rebounds slightly

Taipei, Shares in Taiwan moved slightly higher at the end of Monday's trading session as non-high tech stocks took the spotlight from the sluggish electronics sector, helping the broader market end above the previous closing level, dealers said.

Shares in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, fell in the wake of a computer virus attack that impacted part of its production line, but came off an earlier low on bargain hunting, they said.

Turnover was reduced as market sentiment turned cautious before the Friday deadline for listed companies on the local equity market to report July sales, while lingering concerns over trade friction between the United States and China also discouraged investors from trading, they added.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 11.67 points, or 0.11 percent, at 11,024.10, after moving between 10,994.97 and 11,054.49, on turnover of NT$116.08 billion (US$3.79 billion).

The market opened down 0.14 percent and moved to the day's low on a mild technical correction from the previous session, when the Taiex closed up 0.76 percent, but buying emerged to push up the broader market, dealers said.

As the Taiex moving closer to 11,100 points at around 10:30 a.m., the main board became a tug of war for the rest of the session with TSMC's losses largely offset by gains posted by certain old economy and financial stocks, they said.

"Since the main board had risen a lot from an intraday low of 10,523 points on July 6, it was not surprising that the market was taking a pause, moving in consolidation mode," KGI Securities analyst Phil Chu said.

"In particular, many investors preferred to stay on the sidelines ahead of the Aug. 10 deadline for companies to release their July sales data," Chu said. "Moreover, trade tensions between Washington and Beijing still bothered investors."

On Friday, China announced that it will impose tariffs ranging between 5-20 percent on US$60 billion worth of U.S. goods if the U.S. proceeds with more duties on Chinese imports. The announcement came after U.S. President Donald Trump said he had asked the U.S. Trade Representative to consider increasing proposed tariffs on US$200 billion worth of Chinese goods to 25 percent, from an initially announced 10 percent rate.

"Today, the bellwether electronics sector was largely in the doldrums after TSMC came under pressure and part of its production line was attacked by a computer virus," Chu said.

On Sunday, TSMC said the virus attack, which took place on the evening of Aug. 3, is expected to cut its sales for the third quarter by 3 percent and its gross margin by 1 percentage point.

TSMC fell 0.61 percent to close at NT$245.50, but came off a low of 244.00 with 22.32 million shares changing hands. MasterLink Securities analyst Tom Tang said the stock benefited from bargain hunting as some investors prefer to view the attack as an isolated incident.

The chipmaker has scheduled a news conference at around 5 p.m. Monday to brief the public about the virus attack and its impact.

Also in the bellwether electronics sector, which closed down 0.06 percent, shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., closed unchanged at NT$5,130.00 after hitting NT$5,240.00, while iPhone assembler Hon Hai Precision Industry Co. rose 0.95 percent to end at NT$84.60.

"Fortunately, select petrochemical and financial stocks moved higher, lending some support to the broader market at the end of the session," Chu said.

In the petrochemical sector, shares in Formosa Plastics Corp. gained 0.90 percent to close at NT$112.50 and Formosa Chemicals & Fibre Corp. added 0.42 percent to end at NT$119.00.

Among the gaining financial stocks, E. Sun Financial Holding Co. rose 1.64 percent to close at NT$21.65 and CTBC Financial Holding Co. added 1.18 percent to end at NT$21.45.

Despite the gains in the index, foreign institutional investors sold a net NT$1.62 billion worth of shares on the main board Monday, according to the TWSE.

Source: Focus Taiwan News Channel