Local market down on lackluster Wall Street showing
CNA Saturday, January 18, 2014, 12:00 am TWN
TAIPEI -- Shares in Taiwan closed slightly down on reduced turnover Friday as market sentiment felt the impact of a lackluster showing on Wall Street overnight, prompting investors to stay on the sidelines, dealers said.
PC stocks faced heavier downward pressure as investors took cues from a cautious first quarter sales assessment released by Intel Corp., a major supplier to the PC industry, they said.
Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, however, showed resilience on an upbeat sales forecast for 2014, lending some support to the broader market, they added.
The weighted index of the Taiwan Stock Exchange ended down 16.11 points, or 0.18 percent, at 8,596.00, after moving between 8,580.49 and 8,628.86 on turnover of NT$94.30 billion (US$3.14 billion).
The weighted index opened up 0.19 percent and rose to the day's high on follow-through buying from a session earlier, but the weakness of the Dow Jones Industrial Average on Wall Street led investors to lock in early gains and push down Taiwan's index to the red by closing, dealers said.
"Technically speaking, the local market has entered consolidation mode after it breached 8,600 points (Wednesday). Stiff resistance has kept the index from moving higher and even dragged it down," Ta Ching Securities analyst Andy Hsu said.
Intel's Cautious Forecast Dampens Market Sentiment
Hsu said the PC sector encountered relatively heavy pressure in reflection of Intel's first quarter sales guidance forecast.
"The losses of these PC stocks served as one of the factors to a falling local weighted index today as Intel's forecast further dampened already fragile market sentiment toward the global PC market."
Among the falling PC stocks, contract maker Compal Electronics Inc. (仁寶電腦) fell 3.56 percent to close at NT$23.05, while computer brand Acer Inc. (宏碁電腦) lost 0.78 percent to end at NT$19.00.
"The silver lining today was that TSMC managed itself well above yesterday's closing level as the company anticipated it will outperform the global semiconductor foundry business by posting sales growth in the double digits in 2014," Hsu said.
TSMC, the world's largest contract chip maker, rose 0.45 percent to close at NT$107.50. But the gains were capped by technical hurdles ahead of NT$110.00 after a recent strong showing, Hsu said.
Local suppliers to Apple Inc. meanwhile were mixed on the first day that China Mobile, the largest telecom operator in China, started selling the iPhone 5S and iPhone 5C Friday.
Smartphone camera lens maker Largan Precision Industry Co. (大立光) rose 2.98 percent to close at NT$1,210.00, while iPhone and iPad assembler Hon Hai Precision Industry Co. (鴻海精密) fell 0.12 percent to end at NT$83.80.
In the old economy sector, Nan Ya Plastics Corp. (南亞塑膠) fell 1.49 percent to close at NT$66.00, and Taiwan Cement Corp. (台灣水泥) dropped 0.45 percent to end at NT$43.80.
"The Wall Street performance is expected to continue to dictate the local market as several high-tech giants, such as Apple, will report their results soon," Hsu said.
"If the local market faces further selling, it could find some technical support at around 8,450 points," he said.
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