Taiwan shares fall slightly as early gains dissipate

Taipei, Shares in Taiwan closed marginally lower Thursday as investors locked in their profits from earlier in the session, erasing the gains, amid fears over a pullback after the main board breached 11,100 points, dealers said.

Non-high tech stocks generally came under pressure of profit taking, while some large cap electronics stocks appeared resilient, which prevented the broader market from falling further, they said.

Market sentiment remained haunted by worry over the trade friction between the United States and China, which could adversely affect the world's economy and global demand, dealers said.

The weighted index on the Taiwan Stock Exchange (Taiex) ended down 5.82 points, or 0.05 percent, at 11,093.75, after moving between 11,080.07 and 11,186.05. Turnover totaled NT$112.22 billion (US$3.66 billion).

The market opened up 0.49 percent on follow-through buying from the previous session, when the Taiex closed up 1 percent, as investors were encouraged by a higher Wall Street, where the S&P 500 index and the tech-heavy Nasdaq index hit record highs Tuesday, dealers said.

After the Taiex breached 11,100 points, however, selling emerged mainly among old economy and financial stocks, but TSMC continued to strengthen, which helped anchor the broader market, they said.

"Thanks to TSMC, the local main board ended only slightly lower despite the pressure on most non-tech stocks," MasterLink Securities analyst Tom Tang said.

TSMC, the most heavily weighted stock on the local market, rose 1.74 percent to close at NT$263.50 after hitting a high of NT$268.00, with 48.84 million shares changing hands.

Boosted by news that its rival Globalfoudries Inc. in California had decided to abandon development of the 7 nanometer process, TSMC led the bellwether electronics sector to a 0.49 percent gain at the close.

"The decision by Globalfoundries will strengthen TSMC's lead over its competitors in the global wafer foundry business," Tang said. "That's why investors have been buying into the stock in recent sessions."

He said most of the buying in TSMC on Thursday came largely came from foreign institutional investors,who recorded a net buy of NT$3.56 billion on the main board.

Also in the high tech sector, power management system solutions provider Delta Electronics Inc. rose 2.11 percent to end at NT$121.00, while Largan Precision Co., a smartphone camera lens supplier to Apple Inc., fell 0.32 percent to close at NT$4,745.00, and iPhone assembler Hon Hai Precision Industry Co. dropped 0.61 percent to end at NT$80.90.

With the market focused on TSMC and select tech stocks, the non-tech sector seemed sluggish throughout the session, Tang said.

"After the Taiex breached 11,100 points, technical resistance set in, prompting investors to pocket their gains in a bid to avoid possible losses down the road," he said.

The cement sector, which was hardest hit by the profit-taking, ended down 4.03 percent, with Taiwan Cement Corp. shedding 3.23 percent to close at NT$42.00, and Asia Cement Corp. finishing 5.09 percent lower at NT$41.95.

Among other non-tech stocks, food company Uni-President Enterprises Corp. fell 0.39 percent to close at NT$77.20, Cathay Financial Holding Co. dropped 0.76 percent to end at NT$52.20, and Formosa Plastics Corp. shed 1.32 percent to finish at NT$112.00.

"Turnover remained thin today as many investors appeared reluctant to chase prices," Tang said. "With no signs of any immediate resolution to the trade disputes between the U.S. and China, investors preferred to remain on the sidelines."

Source: Focus Taiwan News Channel