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Local bourse extends losses as high-tech stocks weaken

TAIPEI -- Shares in Taiwan extended their losses Friday as the electronics sector remained weak following the decline posted by the tech-heavy Nasdaq index in New York overnight, dealers said.

Select Taiwanese suppliers to Apple Inc., in particular Hon Hai Precision Industry Co., showed their resilience in outperforming the broader market, they said.

Apple fell 12.35 percent on the Nasdaq overnight to US$450.50 per share. The Nasdaq composite index fell 0.74 percent to 3,130.38.

The weighted index closed down 23.41 points, or 0.30 percent, at 7,672.58, after moving between 7,637.20 and 7,704.31, on turnover of NT$67.78 billion (US$2.33 billion).

The market opened down 0.74 points, but moved higher on a slight technical rebound from the losses seen a session earlier. Selling then reappeared in the high-tech sector and spread to the old economy sector to push the index back down, dealers said.

The downturn was limited, however. The index gained technical support as it approached 7,600 points and investors, with plenty of liquidity on their hands, pursued bargains, they said.

“Look at Hon Hai. After a recent consolidation of the stock, investors were more willing to buy its shares to take advantage of the cheap valuation,” said Concord Securities analyst Kerry Huang, noting that the impact from Apple's quarterly results was quickly fading.

Hon Hai, which assembles iPads and iPhones for Apple, rose 1.09 percent to close at NT$83.40, with 32.42 million shares changing hands, after falling 2.94 percent a day earlier.

Among other Apple suppliers which staged a rebound from an early low, metal casing supplier Catcher Technology Co. gained 0.40 percent to end at NT$127.00, while smartphone camera lens maker Largan Precision Co. fell 1.07 percent to close at NT$742.00 but recovered from a low of NT$733.00.

“But the local electronics sector as a whole failed to make a comeback from yesterday's fall and sentiment toward the broader market remained weak,” Huang said.

Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, fell 0.90 percent to close at NT$99.00, while personal computer vendor Acer Inc. shed 2.44 percent to end at NT$24.00.

Huang said the old economy also failed to attract buying as companies in the plastics, chemical, and textile sectors encountered heavier downward pressure.

Nan Ya Plastics Corp. fell 1.40 percent to close at NT$58.10, and Far Eastern New Century Corp. lost 0.90 percent to end at NT$33.10 .

“Turnover remained thin, so even though select Apple concept stocks rebounded, their gains were not strong enough to help the broader market get out of its current doldrums,” Huang said.

Huang said that unless daily trading volume expands to NT$80 billion or even more, the index is unlikely to jump over technical hurdles ahead of 7,800 points any time soon.

The market's electronics subindex closed down 0.21 percent, while the plastics and chemical subindex ended down 0.62 percent, and the textile sector finished down 0.83 percent.

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