Bourse finishes trade lower as profit taking erodes early gains
CNATAIPEI -- Shares on the Taiwan Stock Exchange closed lower yesterday as investors locked in the earlier gains, pushing the index into negative territory, dealers said.
January 18, 2013, 1:59 pm TWN
Profit taking was focused on the high-tech sector, wiping out the rebound by large-cap stocks such as local suppliers to Apple Inc. and flat panel makers, dealers said.
Selling also extended to the old economy sector, which added to the downward pressure on the broader market, they said.
“After the index fell below the 7,700-point mark, stop-loss selling escalated,” Concord Securities analyst Kerry Huang said. “Today's losses have made the local bourse technically weaker.”
The weighted index closed down 83.79 points, or 1.08 percent, at 7,616.64, after moving between 7,603.27 and 7,774.97, on turnover of NT$94.31 billion.
The market opened up 0.63 percent and moved to the day's high, led by the electronics sector, as investors took cues from a strong rebound by Apple shares on Wall Street overnight, dealers said.
However, as the index moved closer to 7,800 points, profit taking emerged, dragging down not only high tech stocks but also traditional industrial shares such as cement and construction firms, and sending the index below 7,700 points at the end of the session, they said.
“The market is full of uncertainty during the current earnings season so investors are remaining cautious before the market heavyweights in Taiwan and Wall Street release their results,” Huang said.
Among the losing “Apple concept stocks” Hon Hai Precision Industry Co., which assembles iPad and iPhone, fell 0.12 percent to close at NT$83.90, off an early high of NT$85.30, while smartphone camera lens supplier Largan Precision Co. shed 2.04 percent to end at NT$719.00.
Flat panel makers AU Optronics Corp. fell 0.43 percent to close at NT$11.65, off an early high of NT$12.15, while rival Innolux Corp. dropped 1.74 percent to NT$14.15, off an early high of NT$15.15.
However, Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker which was expected to report its fourth quarter results after the close of trade, rose 0.10 percent to NT$99.30.
“Many investors are waiting for TMSC's results. If the chip maker gives an upbeat assessment today for the first quarter, the stock could lead the broader market tomorrow to make a comeback,” Huang said.
He suggested that investors keep a close eye on U.S. based Intel Corp.'s results, which were expected to be released on Wall Street later in the day.
In the old economy sector, Taiwan Cement fell 2.95 percent to close at NT$37.80, and Prince Housing and Development dropped 3.85 percent to NT$20.00.
The construction sector suffered the heaviest selling among the eight major sectors of the market, finishing down 2.9 percent. Textiles lost 2.5 percent, paper and pulp stocks shed 2.4 percent, cement shares dropped 2.1 percent, and foodstuffs closed down 1.9 percent.
Financials fell 1.2 percent, plastics and chemicals lost 1.0 percent, and the machinery and electronics sector closed down 0.9 percent.