Stock market declines due to sidelined institutional investors
CNATAIPEI, Taiwan -- Shares in Taiwan extended losses Saturday as turnover fell below NT$40 billion with many foreign institutional investors sidelined for the weekend, dealers said.
September 15, 2013, 12:08 am TWN
The local bourse was the only equity market in the world to trade in the day to make up for lost trading sessions during next week's Mid-Autumn Festival holiday.
The bellwether electronics sector trended lower with high-priced stocks, such as touch panel maker TPK Holding Co. and Apple Inc.'s smartphone camera lens supplier Largan Precision Co., in focus, dealers said.
In addition to high-tech stocks, investors kept cutting their holdings in the old economy sector amid lingering concerns over what the U.S. Federal Reserve will do about its on-going massive bond buying measures, they said.
The weighted index closed down 25.72 points, or 0.31 percent, at the day's low of 8,142.48, off an early high of 8,176.76, on turnover of NT$38.56 billion (US$1.30 billion).
The market opened up 1.21 points and rose to the day's high on a technical rebound in reflection of the gains posted by Wall Street overnight. But with the index moving closer to 8,200 points, profit taking emerged to send the broader market into negative territory at the end of the session, dealers said.
“Look at the thin trading volume. As many foreign institutional investors were away from the trading floor for the weekend, it was no surprise that the index fluctuated in such a narrow range,” Hua Nan Securities analyst Henry Miao said.
“Although Wall Street closed higher overnight, the upside was capped. Concerns over the Fed's next move still dictated global market sentiment,” Miao said. “Before the U.S. central bank concludes the Sept. 17-18 policymaking meeting, I think the global financial markets will continue to consolidate,” Miao said.
Miao added that as turnover shrank, the high-tech sector, which needs large buying to push share prices higher, failed to make a comeback, and certain high-priced stocks even faced downward pressure.
Touch panel supplier TPK fell 7 percent, the maximum daily decline, to close at NT$284 amid fears that the company would report a net loss for August as price competition escalated.
Although late session bargain hunting helped “Apple concept stocks” recoup part of their earlier losses, many of them still closed in the red amid concerns over how the two new iPhones — the iPhone 5C and iPhone 5S — will be received in the market.
Among the local Apple suppliers, Largan fell 0.53 percent to close at NT$935.00, off an early low of NT$908.00, while Hon Hai Precision Industry Co., which assembles iPhone and iPad for Apple, closed down 0.27 percent at NT$74.80, off a low of NT$74.60.
In the old economy sector, Taiwan Cement Corp. fell 1.99 percent to close at NT$39.40, and textile maker Far Eastern New Century Corp. shed 1.38 percent to end at NT$32.15.
“Before the Fed speaks, the local bourse is expected to move between 8,100 points and 8,200 points on a lack of fresh leads,” Miao said.