Taiwan shares see early gains eroded as TSMC retreats

Shares in Taiwan closed lower on Thursday as investors pocketed earlier gains, pushing down Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock on the bourse, ahead of an investor conference, dealers said.

Market sentiment remained cautious amid lingering concerns over a possible interest rate hike by the U.S. Federal Reserve in December after the newly released minutes from the Fed's September policymaking meeting raised such fears, they said.

The weighted index on the Taiwan Stock Exchange ended down 33.43 points, or 0.36 percent, at 9,219.17, after moving between 9,187.78 and 9,285.05, on turnover of NT$71.97 billion (US$2.27 billion).

The market opened up 0.17 percent and rose to a day high on follow-through buying from the earlier session as TSMC continued its momentum, pushing the broader market past 9,300 points at one point, dealers said.

However, later selling dragged the index into negative territory as investors saw the lackluster performance in other regional markets amid concerns that the Fed could hike its key interest rates at a policymaking meeting scheduled for December, they said.

"The local equity market has been highly correlated to Wall Street. The Fed's decisions are one of the major concerns for the U.S. market and it is impossible for Taiwan's market to isolate itself from those fears for the moment," Hua Nan Securities analyst Henry Miao said.

The minutes of the Fed's September meeting, released overnight, showed that several officials at the U.S. central bank were in favor of hiking interest rates and worried that waiting too long could send the country into recession.

"In addition, as the earnings season in Taiwan has just kicked off, many investors prefer to take to the sidelines and wait for the earnings results," Miao said, referring to the investor conferences scheduled by TSMC and smartphone camera lens maker Largan Precision Co. (???) for Thursday afternoon.

Miao said that earlier gains on the broader market largely reflected optimism toward TSMC, the world's largest contract chip maker, but the stock failed to sustain its upturn and pushed the weighted index lower by the close of day.

Shares in TSMC fell 0.53 percent to close at NT$188.50, off an early high of NT$191.50, with 37.38 million shares changing hands. After the market closed, the chip maker reported a record high of NT$96.76 billion for third quarter net profit.

Shares in Largan, a supplier to Apple Inc., fell 1.84 percent to end the day at NT$3,780.00 after hitting an early high of NT$3,850.00. Largan, the most expensive stock on the TWSE, reported after the market closed third quarter earnings of NT$6.96 billion, up 88.60 percent from the previous quarter.

Also in the high-tech sector, shares in Hon Hai Precision Industry Co. (??) bucked the downturn on the weighted index, rising 0.25 percent to close at NT$81.80, while smartphone brand HTC Corp. (???) shed 3.11 percent to end at NT$90.30, although the company said that it has sold more than 140,000 units of the HTC Vive virtual reality headset since it went on global sale in April.

In the financial sector, which closed down 0.88 percent, shares in Fubon Financial Holding Co. (???) lost 0.76 percent to finish the day at NT$45.45, down from an early high of NT$46.15 and Cathay Financial Holding Co. (???) fell 1.72 percent to close at NT$39.95.

"I expect that the local main board will remain in consolidation mode for the near future due to fears over global volatility. Due to the current low turnover, it is unlikely the weighted index will go much higher than 9,300 points any time soon," Huang said.

Source: Focus Taiwan News Channel