Local stock market finishes down, led by TSMC
CNATAIPEI -- Shares in Taiwan trended lower to close below 8,400 points Friday as investors locked in gains posted by Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the market, in recent sessions, dealers said.
October 26, 2013, 12:04 am TWN
In addition to a weaker electronics sector, financial stocks came under pressure amid worries that the Legislative Yuan will not pass a service trade agreement signed with China by the end of this year to undermine banks' efforts in extending their reach in the China market, the dealers said.
Market sentiment remained cautious to keep turnover low as many investors stayed on the sidelines, waiting for results from high-tech heavyweights during the current earnings season, they added.
The weighted index closed down 67.10 points, or 0.79 percent, at 8,346.62, after moving between 8,322.15 and 8,390.25, on turnover of NT$79.63 billion (US$2.71 billion).
The market opened down 0.40 percent as investors shrugged off a rising Wall Street overnight, and losses extended with large-cap stocks, in particular in the electronics and financial sectors, in focus, the dealers said.
With the index moving closer to 8,300 points, however, some bargain hunters emerged to prevent the broader market from falling further, which helped the bourse recover part of its earlier losses, they said.
“As the Dow Jones Industrial Average stood above 15,000 points overnight, many investors here fear that Wall Street will encounter a major pullback soon, which could send ripples through the global markets,” Hua Nan Securities analyst Henry Miao said.
“It was no surprise that investors here took the money and ran, in a bid to avoid possible losses down the road. Liquid large-cap stocks, like TSMC, became the targets of the latest selling,” Miao said.
TSMC, the world's largest contract chip maker, fell 2.73 percent to close at NT$107.00, with 36.03 million shares changing hands.
Selling in TSMC also spread to other semiconductor stocks, with United Microelectronics Corp., another major contract chip maker, down 1.57 percent to close at NT$12.55, and Integrated circuit designer MediaTek Inc. down 1.40 percent to end at NT$388.50.
“Along with concerns over external factors, worries over high tech stocks' third-quarter results also weighed on market sentiment, prompting investors to cut their holdings,” Miao said.
The bellwether electronics sector closed down 1.04 percent.
Touch panel maker TPK Holding Co. gave up earlier gains in the late session to close down 0.66 percent at NT$226.00, as investors remained cautious about escalating price competition in the industry.
Market heavyweights such as UMC, MediaTek and TPK are scheduled to hold investor conferences next week to announce their third-quarter results and give fourth quarter guidance.
Bucking the downturn in the electronics sector, smartphone vendor HTC Corp. drew bargain hunting on relatively low valuations, to close up 3.09 percent at NT$150.00.
The financial sector closed down 0.72 percent, with Cathay Financial Holding Co. down 0.65 percent to close at NT$45.55 and Hua Nan Financial Holding Co. down 1.15 percent to end at NT$17.25.
“There are fears that due to strong resistance from the opposition parties, the Legislative Yuan is unlikely to pass a cross-Taiwan Strait service trade agreement at the end of this year. I am afraid that the pace of banks' expansion in the China market will be slowed down accordingly,” Miao said.