Sun, Jun 10, 2018 - Page 14 News List

Electronics sector leads TAIEX decline

PULLBACK:The market opened down and stayed there following the NASDAQ’s overnight fall as investors scrambled to reduce their large-cap electronics holdings

Staff writer, with CNA and AFP

Local shares on Friday took a beating, with the bellwether electronics sector in focus, pushing down the benchmark index to a level close to the nearest technical support of about 11,100 points, dealers said.

Following losses sustained by the tech-heavy NASDAQ, investors rushed to dump large-cap electronics stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and iPhone assembler Hon Hai Precision Industry Co (鴻海精密), they said.

The TAIEX on Friday closed down 95.33 points, or 0.85 percent, at 11,156.42, after moving between 11,122.98 and 11,243.59, on turnover of NT$161.01 billion (US$5.4 billion).

Friday’s closing level was below the five-day moving average of about 11,160 points, but was a 1.9 percent increase from a close of 11,156.42 a week earlier.

The market opened down 8.16 points and stayed below the previous close as the electronics sector was in the doldrums in the wake of the falling NASDAQ, which fell 0.7 percent overnight, dealers said.

Selling became more pronounced in the afternoon session, pushing the TAIEX down by more than 100 points at one point, led by TSMC, Hon Hai and other tech stocks, before bargain hunters emerged in the late trading session to recoup some of the losses by the end of the day, they said.

“After yesterday’s gains when the local main board moved closer to the intraday high of 11,270 points [on Jan. 23], many investors turned cautious about an immediate possible major pullback,” KGI Securities Co (凱基證券) analyst Phil Chu (朱有志) said.

“In particular, after witnessing the NASDAQ weaken overnight, local investors scrambled to cut their holdings in large-cap electronics and retain as much cash as possible in a bid to avoid further possible losses down the road,” Chu said.

“I think foreign institutional investors stood on the sell side,” he added.

Foreign institutional investors on Friday sold a net NT$3.92 billion of shares on the main board, Taiwan Stock Exchange data showed.

TSMC, the most heavily weighted stock on the local market, fell 1.30 percent to close at NT$227 with 23.52 million shares changing hands.

Led by TSMC, the bellwether electronics sector ended down 1.18 percent.

Among other falling tech heavyweights, Hon Hai, second to TSMC in terms of market value, shed 3.18 percent to close at NT$88.30, although its subsidiary Foxconn Industrial Internet Co Ltd (FII, 富士康工業互聯網) had a strong showing on the first day of its listing on the Shanghai Stock Exchange.

“It is possible for foreign investors to sell Hon Hai to buy FII today,” Chu said.

Also in the electronics sector, shares in Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, lost 2.15 percent to close at NT$4,545, while Pegatron Corp (和碩), another iPhone assembler, rose 0.15 percent to end at NT$67.90 on reports that it would secure orders to assemble new, larger LCD screen iPhones.

Selling spread to non-high-tech stocks, although the financial sector remained resilient, falling only 0.27 percent, Chu said.

Cathay Financial Holding Co (國泰金控), one of the nation’s leading financial holding firms, ended unchanged at NT$55 after the company reported an almost 70 percent year-on-year increase in net profit for the first five months of this year.

In the old economy sector, shares in Nan Ya Plastics Corp (南亞塑膠) fell 1.61 percent to close at NT$108.50, Formosa Plastics Corp (台灣塑膠) lost 1.36 percent to end at NT$85.50 and food conglomerate Uni-President Enterprises Corp (統一企業) dropped 0.66 percent to close at NT$75.

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