TAIEX falls on futures-led selling, wary over the fate of US Fed program
CNATAIPEI -- Shares in Taiwan ended lower Friday on futures-led selling, as foreign institutional investors dragged down share prices in the spot market to profit on futures, dealers said.
August 10, 2013, 12:08 am TWN
Foreign institutional selling focused on large-cap stocks, in particular in the financial and old economy, while select electronics heavyweights attracted bargain hunters to stabilize the high-tech sector, the dealers said.
Market sentiment remained cautious about what the U.S. Federal Reserve will do next about its massive bond-buying program, prompting investors to further shift their holdings, they added.
The weighted index closed down 51.53 points, or 0.65 percent, at 7,856.14, after moving between 7,853.97 and 7,955.00, on turnover of NT$76.96 billion (US$2.57 billion).
The market opened up 0.60 percent at the day's high on a technical rebound from the losses seen in the past few sessions, but after the index moved to the nearest technical resistance level at around 8,000 points, selling emerged to send the index into negative territory at the end of the session, the dealers said.
As Wall Street rose just slightly overnight, providing investors here with few hints to act, many investors preferred to stay on the sidelines, which kept the daily trading volume low, they added.
“Foreign institutional investors built up a large number of short-position contracts in the futures market — about 15,000 contracts as of yesterday — paving the way for them to sell in the spot market today,” Concord Securities analyst Kerry Huang said.
“Foreign investors remained wary of a possible early exit by the U.S. Fed from its monthly US$85 billion stimulus measures. With the Fed concerns in place, they are likely to continue to sell stocks,” Huang said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net of NT$8.19 billion-worth of local shares Friday.
Huang said the non-electronics sector became the target of selling as investors locked in gains from recent sessions.
The financial sector closed down 0.98 percent, although 14 financial holding companies listed on the main board and the over-the-counter market posted a 24 percent year-on-year increase in net profit for July.
Among the losing financial stocks, Fubon Financial Holding Co. fell 1.10 percent to close at NT$40.55 and Cathay Financial Holding Co. lost 1.79 percent to end at NT$41.55.
Bucking the downtrend of the broader market, smartphone vendor HTC Corp. rose 6 percent to close at NT$159.00 after the company said it had launched the HTC Desire 500 model in Europe in a bid to grasp a higher share of the mid-range smartphone market.
“HTC's gains were simply technical in nature after its recent heavy losses. Earnings uncertainty still haunts the stock amid fierce competition,” Huang said.
Touch panel maker TPK Holding Co. rose 2.26 percent to end at NT$317.00, while Taiwan Semiconductor Manufacturing Co. closed unchanged at NT$96.40.