Shares in Taiwan closed lower yesterday amid renewed geopolitical tensions in the wake of a nuclear test conducted by North Korea a day earlier, dealers said.
While many stocks across the board came under pressure, contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the local market, remained resilient, propping up the broader market, dealers said.
The TAIEX closed down 0.24 percent at 10,569.87, on turnover of NT$105.44 billion (US$3.5 billion).
The market opened down 9.38 points in a knee-jerk reaction to the latest nuclear test by North Korea on Sunday, which caused a magnitude 6.3 tremor there and sent political ripples across the region, dealers said.
After the initial fall, the local main board bounced back somewhat, but with the weighted index breaching 10,600 points, selling re-emerged and the broader market remained below the previous closing level for the rest of the session, they said.
“Judging from the downturn, I think North Korea’s nuclear bomb test did affect market sentiment,” KGI Securities (凱基證券) analyst Phil Chu (朱有志) said. “In particular, as the weighted index moved closer to 10,619 points, many investors became more reluctant to chase prices and decided to cut their holdings, seizing on political tensions as a reason.”
Chu said reduced concerns over a possible rate hike by the US Federal Reserve at its next policymaking meeting also lent some support to the local main board yesterday.
Investors have been less concerned about a rate hike since the release of the latest US jobs data, which showed 156,000 new jobs were created in the nation last month, short of the market estimate of 180,000.
“The silver lining was that TSMC, the world’s largest contract chipmaker, traded above Friday’s closing level, helping to stabilize the broader market [yesterday],” Chu said.
TSMC shares rose 0.46 percent to close at NT$217.5.
Commenting on the performance of the local equity market after the nuclear test, Chien Hung-ming (簡宏明), chief secretary of the Financial Supervisory Commission’s (FSC) Securities and Futures Bureau, told the media that the impact seemed limited.
Chien said that so far this year, the net fund inflow from foreign institutional investors has been almost US$10 billion, which indicates a positive outlook on local equities.
Nonetheless, the FSC will continue to closely watch the domestic financial market in the wake of the nuclear test, he said.
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