Local shares end down as market in consolidation
CNATAIPEI--Shares in Taiwan closed at the day's low Tuesday as turnover remained weak, and dealers expected the local market to remain in a consolidation mode in the near future.
August 28, 2013, 12:24 am TWN
The benchmark index closed down 74.13 points, or 0.93 percent, at 7,820.84 on turnover of NT$68.93 billion (US$2.29 billion), after reaching the day's high of 7,895.23 early in the session.
Kent Liu, a fund manager at Taishin Securities Investment Trust Co., said the low turnover resulted from ongoing concerns over the United States Federal Reserve's possible scaling back of its monetary stimulus program and selling pressures on stocks going ex-dividend in August and September.
One such stock was Chailease Holding Co., which went ex-dividend Tuesday following a previously announced NT$1 stock dividend. Its shares closed 2.23 percent lower at NT$61.3.
Several heavyweight electronics companies, including chip-makers Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC) and panel maker AU Optronics Corp. (AUO), were also down and failed to lift the broader market.
TSMC fell 1.24 percent to close at NT$95.60, UMC lost 0.81 percent to end at NT$12.20, and AUO closed 1.71 percent lower at NT$11.50.
Shares of contract manufacturers and component suppliers in the Apple supply chain also closed lower, with Hon Hai Precision Industry Co. dropping 1.6 percent to NT$80 and Pegatron Corp. falling 3.36 percent to NT$46.
The most expensive stock on the local market, Largan Precision Co., which supplies smartphone camera lenses to Apple, plunged below NT$1,000 and closed 6.42 percent lower at NT$992.
Another Apple supplier, touch-screen maker TPK Holding Co., fell 6.4 percent to NT$300.
A few companies in the communications sector bucked the downward trend, buoyed by a meeting on communications cooperation between Taiwan and China that opened in Taichung on Tuesday.
Shares of telecom operators Chunghwa Telecom Co. and Taiwan Mobile Co. gained 0.32 percent and 0.95 percent to close at NT$94 and NT$106, respectively, but Far EasTone Telecommunications Co. closed down 0.28 percent at NT$72.5.
On the market's outlook, Liu was skeptical that the high-tech sector will lead a market rebound unless new killer products that can jumpstart demand are introduced.
He pointed to yields on U.S. Treasury bills and U.S. job market data to be released on Friday as key indicators that will affect investor confidence in the short term.