Taiwanese shares ended lower on Friday before semi-annual index adjustments by MSCI Inc were to take effect after the market’s close, dealers said.
In the index adjustments announced earlier last month, Taiwan’s weighting was cut slightly in the MSCI Emerging Markets Index and the MSCI All Country Asia ex-Japan Index.
Selling focused on select large-cap stocks, such as chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), electronics contractor Hon Hai Precision Industry Co (鴻海精密) and IC designer MediaTek Inc (聯發科), as investors rushed to pocket previous gains, dealers said on Friday.
The weighted index closed down 33.09 points, or 0.36 percent, at the day’s low of 9,075.91, off an early high of 9,139.57, on turnover of NT$135.25 billion (US$4.51 billion). However, it was up 0.75 percent from the previous Friday’s 9,008.22.
The market rose 0.24 percent on opening and moved to the day’s high on a technical rebound, but after the index breached 9,100 points, downward pressure set in, dragging the index into negative territory, dealers said.
“It was no surprise that investors adjusted their portfolios and lowered their holdings in the local bourse after its weighting in the MSCI Index was cut,” Asia Securities Investment Consultant (亞洲投顧) analyst Chang Chih-cheng (張智誠) said.
The willingness of investors to increase their holdings was also affected by worries about possible negative leads from abroad during the Dragon Boat Festival holiday, Chang said. Taiwan’s markets will be closed tomorrow for the holiday.
Chang said the selloff on Friday was led by large-cap stocks: TSMC dipped 2.05 percent to NT$119.50, Hon Hai dropped 1.18 percent to NT$92.40 and MediaTek fell 2.21 percent to NT$487. However, investors also picked up some market laggards, such as touchpanel maker TPK Holding Co (宸鴻), which rose 2.53 percent to NT$243.
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