Local market ends under 8,600, HTC bucks downtrend
January 22, 2014, 12:13 am TWN
TAIPEI--Shares in Taiwan pulled back to close below 8,600 points Tuesday as the bellwether electronics sector turned weaker with investors locking in gains posted a session earlier, dealers said.
Led by large-cap stocks, in particular integrated circuit designer MediaTek Inc. (聯發科), the high-tech sector trended lower after JP Morgan downgraded a recommendation on the Taiwanese IC designer, the dealers said.
However, Taiwan-based smartphone vendor HTC Corp. (宏達電) outperformed the broader market on hopes that the company will launch a new flagship model to boost shipments.
The weighted index on the Taiwan Stock Exchange ended down 21.66 points, or 0.25 percent, at the day's low of 8,599.90, off an early high of 8,650.14, on turnover of NT$105.98 billion (US$3.53 billion).
The market opened up 0.21 percent and rose to the day's high on follow-through buying from a session earlier, but selling in select large-cap electronics emerged, pushing down the index into the red by the end of the session, the dealers said.
"Although the electronics sector moved higher to lift the broader market yesterday, many investors remained reluctant to chase prices today and even shifted to the sell side," President Securities analyst Vickie Hsieh said.
"MediaTek was the largest victim of the selling as investors rushed to dump the stock in the wake of JP Morgan's downgrade," Hsieh said.
The U.S.-based brokerage cut its recommendation on MediaTek shares to "neutral" from "overweight" amid concerns over the IC designer's relatively slow pace in developing chips for Time-Division Long-Term Evolution (TD-LTE) use.