Taiwan shares end slightly lower; large cap stocks stay mixed

Taipei, April 16 (CNA) Shares in Taiwan closed slightly lower Monday as large cap stocks across the board appeared mixed after Wall Street slumped at the end of last week, dealers said.

Market sentiment remained cautious over geopolitical tensions and concerns that the U.S. Federal Reserve will speed up the pace of interest rate hikes this year, they said.

The weighted index on the Taiwan Stock Exchange, the Taiex, closed down 10.84 points, or 0.10 percent, at 10,954.55, after moving between 10,921.17 and 10,974.94 on turnover of NT$124.29 billion (US$4.23 billion).

The market opened 3.03 points lower and fell to the day's low at around 9:45 a.m. as investors reacted to a 0.50 percent fall in the Dow Jones Industrial Average and a 0.47 percent slide in the tech-heavy Nasdaq index on Friday, dealers said.

The Taiex moved in a relatively narrow range the rest of the session amid worries over Middle East tensions after a U.S.-led coalition launched airstrikes against Syria over the weekend as well as concerns over faster rate hikes in the United States, they said.

"To me, investors seemed to put more emphasis on the Fed than on the situation in Syria because the minutes of the Fed's latest meeting suggest strong economic growth and higher inflation," KGI Securities analyst Phil Chu said.

In the minutes of the U.S. Federal Reserve's March policy meeting released last week, all of the central bank's board members agreed the U.S. economy is growing at a strong pace and inflation is moving up as well, which would justify continued interest rate increases this year.

"So the U.S. dollar gained the upper hand against the Taiwan dollar today as foreign investors moved their funds out of the country," Chu said. "Falling liquidity is the last thing the equity market wants to see."

Chu said the external concerns led many investors to cautiously remain on the sidelines, which limited Monday's turnover and kept many market heavyweights within a narrow trading range.

Among the large cap stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co., the most heavily weighted stock in Taiwan, fell 0.41 percent to close at NT$243.50, with 18.33 million shares changing hands.

Also in the electronics sector, flat panel maker Innolux Corp. shed 4.38 percent to end at NT$12.00, and rival AU Optronics Corp. lost 1.87 percent to close at NT$13.10.

Bucking the downturn on the broader market, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, staged a technical rebound, closing 0.69 percent higher at NT$87.60.

The old economy sector was also mixed Monday. Formosa Chemicals & Fibre Corp. lost 0.45 percent to close at NT$109.50, and Formosa Petrochemical Corp. dropped 1.24 percent to end at NT$119.00, while food brand Uni-President Enterprises Corp. rose 1.27 percent to close at NT$71.60.

In the financial sector, which ended down 0.42 percent, Fubon Financial Holding Co. lost 1.17 percent to close at NT$50.60, while E. Sun Financial Holding Co. gained 0.50 percent to end at NT$20.15.

"There is stiff technical resistance ahead of the 11,000-point mark right now," Chu said. "Unless turnover expands to NT$130 billion or higher, it won't be easy for the market to clear that hurdle."

Source: Focus Taiwan News Channel