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September 23, 2017

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Local market down on Wall Street losses

TAIPEI, Taiwan -- Shares in Taiwan closed lower Wednesday as investors took cues from a falling Wall Street overnight amid lingering concerns over political tension in Ukraine, dealers said.

The bellwether electronics sector followed the tech-heavy NASDAQ index in a fall, while the financial sector outperformed the broader market, lending support to the index, the dealers said.

The weighted index on the Taiwan Stock Exchange ended down 17.60 points, or 0.20 percent, at 8,684.73, after moving between 8,651.99 and 8,684.73 on turnover of NT$83.46 billion (US$2.75 billion).

The market opened down 0.36 percent as high-tech heavyweights such as integrated circuit designer MediaTek Inc. (聯發科) came under pressure in line with their counterparts in the U.S. market, the dealers said.

Selling continued to drag down the index further before some bargain hunters emerged to push up financial stocks, preventing the broader market from falling further at the close, they said.

"Judging from the gains posted by the financial sector, I suspect the buying came from government-led funds in a bid to stabilize the broader market," Mega International Investment Services Corp. analyst Alex Huang said.

In the financial sector, which closed up 0.16 percent, Cathay Financial Holding Co. (國泰金控) gained 0.91 percent to end at NT$44.40 off an early low of NT$43.80, while Fubon Financial Holding Co. (富邦金控) closed unchanged at NT$41.50 after recovering from an early low of NT$41.30.

Market Sentiment Turns Cautious on Ukraine Referendum: Analyst

"The local market remained in consolidation mode as market sentiment turned cautious about the political situation in Ukraine," Huang said. "Many investors are waiting to see the results of a referendum on Ukraine's Crimea region scheduled for March 16 that will decide whether the region returns to Russian rule," he said.

Huang said that as the parliament in Crimea has declared independence from Ukraine even ahead of the referendum, the political situation there has become riskier.

"After witnessing the Wall Street fall overnight, many investors here simply rushed to cut their holdings soon after the local market opened amid fears that the geopolitical tension will send more ripples through the global markets," Huang said.

Among the falling large-cap stocks, MediaTek fell 3.90 percent to close at NT$456.00 after Citigroup Global Markets gave a cautious assessment, saying that the IC designer has lagged behind in the competition for the 4G chip market in China.

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