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April 29, 2017

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Local market ends down in thin trade

TAIPEI, Taiwan -- Shares in Taiwan closed slightly lower Wednesday on reduced turnover as many investors remained cautious about the nearest technical resistance level at around 8,900 points, dealers said.

The weighted index on the Taiwan Stock Exchange ended down 25.37 points, or 0.28 percent, at 8,862.42, after moving between 8,848.53 and 8,905.04 on turnover of NT$67.22 billion (US$2.23 billion).

Investors Rush to Profit

However, investors turned wary of the high technical hurdles down the road and rushed to take profits. The late-session selling largely focused on financial stocks that had gained in the past few sessions, they said.

"Looking at the thin trading volume, I suspect that many foreign institutional investors stayed on the sidelines, which made it hard for the broader market to overcome strong technical resistance," Mega International Investment Services Corp. analyst Alex Huang said.

The market opened up 6.37 points and rose to the day's high in a technical rebound from a session earlier as investors ignored a pullback on Wall Street overnight, the dealers said.

High-priced high-tech stocks, such as smartphone camera lens supplier Largan Precision Co. (大立光電), stayed weak, while some investors locked in their recent gains in the financial sector to add downward pressure to the broader market, the dealers said.

Selling in select old economy stocks, in particular in the textile sector, continued as investors remained worried about operations in Vietnam which has been affected by anti-China protests in the Southeast Asian country, they added.

Huang said that without active foreign institutional participation, the bellwether electronics remained in the doldrums, with high-priced stocks the focus of selling.

Largan fell 0.51 percent to close at NT$1,950 despite optimism toward its bottom line, which was supported by increasing orders from Apple Inc.

Largan Enters Consolidation Mode

"After Largan shares hit the NT$2,000 mark (earlier this month), the stock fell into consolidation mode. Unless foreign investors raise their stakes in Largan, the stock is unlikely to emerge from the current weakness," Huang said.

Integrated circuit designer MediaTek Inc. (聯發科技) lost 1.52 percent to close at NT$488.50, and smartphone vendor HTC Corp. (宏達電) shed 1.52 percent to end at NT$162.50.

Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), the most heavily weighted stock in the local market, closed down 0.41 percent at NT$120.50. Huang said that if TSMC had suffered more downward pressure, the index would have lost further at the close.

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