Market in consolidation awaiting US data
CNATAIPEI -- Shares in Taiwan ended in consolidation mode Friday before the U.S. released its August employment report later in the day, which could give a clearer hint about the U.S. Federal Reserve's policy, dealers said.
September 7, 2013, 12:03 am TWN
Largan Precision Co., which provides smartphone camera lenses to Apple and other phone vendors, failed to react positively to a 14 percent month-on-month increase in sales for August, which impacted market sentiment toward the electronics sector, the dealers said.
The weighted index closed down 4.90 points, or 0.05 percent, at 8,164.20, after moving between 8,155.50 and 8,182.56 Friday on turnover of NT$91.63 billion (US$3.07 billion).
The market opened up 0.14 percent and rose further to the day's high on follow-through buying from a day earlier, but as the index moved closer to the nearest technical resistance level at around 8,200 points, profit-taking emerged to send the market into the red, the dealers said.
“It was a quiet day,” Ta Ching Securities analyst Andy Hsu said. “Many investors were waiting for the U.S. employment report.”
Hsu said the August non-farm payroll report from Washington could serve as an important indication on how the Fed will map out its monetary policy in a Sept. 17-18 policymaking meeting after its current monthly US$85 billion bond-buying program.
“The market has widely expected that the Fed will scale back its massive fund injections. But the issue is when and how the U.S. central bank will do so,” Hsu said.
Hsu said the high-tech sector pulled back from the gains posted a day earlier.
In a statement released after the market close Thursday, Largan said it posted NT$2.41 billion in consolidated sales, up 14.48 percent from July and 56.85 percent from a year earlier, but its shares fell 3.81 percent to close at NT$1,010 Friday.
“Largan's August sales report is as good as the market had previously expected. Investors simply sold the stock on the news today,” Hsu said
Meanwhile, Daiwa Securities said it has concerns about Largan's profit margin, which could be hurt by shipments of less advanced smartphone lenses for production of Apple's lower cost iPhones.
In the flat screen sector, AU Optronics Corp. lost 2.15 percent to close at NT$11.40 and HannStar Display Corp. shed 2.76 percent to end at NT$12.35 on falling TV panel prices in the first half of September.
In the financial sector, Fubon Financial Holding Co. fell 1.09 percent to NT$40.85, and SinoPac Financial Holdings Co. lost 1.10 percent to end at NT$13.45 as the financial sector took a breather after two winning sessions.
“External factors are expected to continue to dictate the local market, but the index could have strong technical support at around 8,000 points for the moment,” Hsu said.
He said investors should also pay attention to whether the U.S. will launch a military strike against Syria and whether the U.S. Congress will raise a debt ceiling for the government.