Taiwan Stock Exchange declines to 8,687.63 amid Ukraine tensions
CNA March 15, 2014, 12:05 am TWN
TAIPEI -- Shares in Taiwan pulled back Friday amid raised tensions in Ukraine after a move by Russia to stage military exercises near the border of the East European country, dealers said.
The bellwether electronics sector, which led the gains on the broader market in the previous session, suffered relatively heavy downward pressure as investors here took cues from a slide on the tech-heavy NASDAQ index overnight, dealers said.
Old economy shares, in particular the "China concept stocks," which have close business ties with the mainland, also trended lower in reflection of Beijing's disappointing economic data, dealers added.
The weighted index on the Taiwan Stock Exchange closed down 60.16 points, or 0.68 percent, at 8,687.63, after moving between 8,677.81 and 8,709.56, on turnover of NT$90.81 billion (US$3.0 billion).
The market opened down 0.57 percent in a knee-jerk reaction to a drop on Wall Street overnight as the Russian military exercises exacerbated tensions in Ukraine ahead of a March 16 referendum to decide whether Crimea should stay in Ukraine or join Russia, dealers said.
With selling in the electronics sector on the rise, the index fell to the day's low before some bargain hunting emerged, limiting the losses by the close, dealers said.
"With the global equity markets shaky amid the geopolitical unease, the Taiwan market was unlikely to be unaffected by the negative overseas leads," KGI Securities analyst Eason Lee said.
Investors Prefer to Wait and See for the Moment
"The reduced turnover was evidence that many investors preferred to stay on the sidelines for the moment," Lee said.
The electronics sub-index closed down 0.68 percent, with Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, falling 1.29 percent to end at NT$115.00.
"TSMC shares simply followed the drop on Wall Street but I'm still confident about the contract chip maker's earnings outlook," Lee said.
If TSMC falls below NT$112.50, it would a good time for bargain hunters to buy the stock, he added.
Hon Hai Precision Industry Co. (鴻海精密), the world's largest contract electronics supplier, fell 0.70 percent to close at NT$85.50, and notebook computer ODM services provider Quanta Computer Inc. (廣達電腦) dropped 1.21 percent to end at NT$81.50.
However, certain small and mid-cap electronics stocks outperformed the broader market, dealers said. Among them, power management system supplier AcBel Polytech Inc. (康舒科技) rose by the maximum daily 7 percent to end at NT$38.15 after it reported an almost 20 percent increase in net profit for 2013.
Among the China concept stocks, Asia Cement Corp. (亞洲水泥) fell 1.44 percent to close at NT$37.65 and Formosa Plastics Corp. (台塑集團) shed 2.00 percent to end at NT$73.50 after China reported disappointing factory output data for the first two months of the year.
Lee said China's latest economic data had raised concerns over the economic growth rate there and it was no surprise that the China concept stocks came under pressure.
"As for the broader market, I expect the political tensions in Ukraine will continue to affect the global markets, which could create more volatility in the local market down the road," Lee said.
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