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June 24, 2017

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Local market dives, hacking hurts Apple stocks

TAIPEI -- Shares in Taiwan took a dive Tuesday after the rally seen a session earlier as Taiwanese suppliers to Apple Inc. came under pressure, dragging down the bellwether electronics sector, dealers said.

The weighted index on the Taiwan Stock Exchange closed down 113.34 points, or 1.19 percent, at 9,399.72, after moving between 9,388.13 and 9,503.65, on turnover of NT$87.83 billion (US$2.93 billion).

Absence of a Trend

"After today's steep decline, the local market has entered consolidation mode," Asia Securities Investment Consultant analyst Chang Chih-cheng said. "Further losses are possible but I expect the market will see some near-term technical support at around 9,300 points," Chang said.

The alleged hacking of Apple's iCloud service prompted investors to speculate that Apple shares could face downward pressure in the U.S. market later in the day, which is likely to affect the performance of "Apple concept stocks" in the local market, they said.

The market opened down about 0.10 percent as local shares encountered stiff technical resistance after the index breached 9,500 points a day earlier, dealers said.

Particularly heavy selling increased on Apple concept stocks, especially smartphone lens supplier Largan Precision Co. (大立光電) and metal casing maker Catcher Technology Co. (可成科技), they said.

Apple and the U.S. Federal Bureau of Investigation are reportedly working on probing the alleged breach that let hackers gain access to nude photos of several celebrities, including Oscar winner Jennifer Lawrence.

Apple Turns Toxic

Many investors have feared that the hacking problems will send Apple shares into a tailspin after Wall Street opens later today, so they tended to dump local Apple suppliers for the moment," Chang said.

"In addition, investors have worried that some of these Apple suppliers will report disappointing August sales data as the U.S. firm was said to have postponed some of its orders," Chang said. He added, however, that after the delayed orders in August, sales for September could pick up.

Among the falling Apple concept stocks, Largan shed 4.18 percent to close at NT$2,405.00 and Catcher lost 2.92 percent to end at NT$299.00. Hon Hai Precision Industry Co. (鴻海精密工業), which assembles iPhones and iPads, closed down 0.99 percent at NT$100.50.

Meanwhile, Taiwan Semiconductor Manufacturing Co. (台灣積體電路), the most heavily weighted stock in the local market, lost 1.95 percent to close at NT$126.00, and integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (日月光半導體) lost 1.58 percent to end at NT$37.40.

"These high-tech blue chips posted strong gains yesterday. Investors simply used Apple's hacking problems as an excuse to take profits," Chang said. "Fears over a major pullback ahead of 9,500 points prompted investors to take the money and run."

In the financial sector, CTBC Financial Holding Co. (中信金控) fell 1.36 percent to close at NT$21.70, and Cathay Financial Holding Co. (國泰金控) lost 1.55 percent to end at NT$50.70.

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