Magic 8,000-point hurdle haunts Taiwan market
CNATAIPEI -- Shares in Taiwan ended lower Friday as investors again caved in to technical hurdles when the benchmark index approached 8,000 points, dealers said.
March 16, 2013, 12:06 am TWN
While some large cap high-tech stocks, in particular smartphone camera lens supplier Largan Precision Co., regained momentum, the broader market still moved in a narrow range as investors lacked incentives to chase prices, they said.
Select old economy stocks in the cement and food sectors trended lower on profit-taking, while the financial sector suffered further downward pressure throughout the session, they added.
The weighted index closed down 24.27 points, or 0.3 percent, at 7,927.49, after moving between 7,924.94 and 7,999.92, on turnover of NT$92.12 billion (US$3.10 billion).
The market opened up 0.45 percent and moved to the day's high within minutes on strong gains on Wall Street, which hit another record high overnight, dealers said.
But with the market poised to crash through the 8,000-point barrier, investors got cold feet and started selling shares, eventually pulling the market into negative territory, they said.
“It seemed a record high on Wall Street failed to impress investors here,” Grand Cathay Securities analyst Mars Hsu said. “Many investors in the local bourse remained haunted by worries over high technical hurdles ahead of 8,000 points.”
Although the U.S. market hit a fresh high, major high-tech stocks, like Apple, underperformed the broader market, which did little to help Taiwan's market in which the electronics sector is the most heavily weighted, Hsu said.
The electronics sector closed down 0.36 percent amid lingering concerns over slow season effects in the first quarter.
Flat panel stocks encountered heavy selling, with Innolux Corp. down 2.22 percent to close at NT$17.60 and rival AU Optronics Corp. down 2.68 percent to end at NT$12.70.
Largan, however, gained 4.56 percent to close at NT$779.00 on speculation that the company has secured orders from South Korea's Samsung Electronics Co., which unveiled its latest flagship smartphone— the Galaxy S IV — in New York on Thursday.
In the old-economy sector, Taiwan Cement Corp. fell 2.01 percent to close at NT$36.65, and food maker Uni President Enterprises Corp. shed 2.02 percent to end at NT$58.30.
The financial sector finished down 0.82 percent. Cathay Financial Holding Co. shed 1.85 percent to close at NT$39.90, but Fubon Financial Holding Co. ended unchanged at NT$42.85.
“The local market has remained in the doldrums for some time. If investors do not have any incentives to buy over the next few sessions, the index could fall below 7,900 points and even test 7,800 points soon,” Hsu said.