Local shares on Friday closed little changed after recouping most of their earlier losses caused by growing trade friction between the US and China, dealers said.
Bargain hunters emerged in the afternoon trading session to pick up select large-cap stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), helping the broader market recover by the end of the session, they said.
In addition to concerns over US-China trade relations, local investors also remained cautious ahead of the deadline on Tuesday for listed firms to release their sales reports for last month, they added.
The TAIEX on Friday ended down 3.24 points, or 0.03 percent, at 10,608.57, after moving between 10,523.58 and 10,665.72, on turnover of NT$158.77 billion (US$5.21 billion). That was a decrease of 2.1 percent from a close of 10,836.91 on June 29.
The market opened up 0.31 percent and rose to the day’s high on a technical rebound from the earlier session, when the weighted index closed down 1.03 percent, as local investors took their cue from gains posted on Wall Street, where the Dow Jones Industrial Average ended up 0.75 percent overnight, dealers said.
With the TAIEX breaching 10,600 points at one point, selling set in, pushing the main board down to the day’s low at about 11am before bargain hunters turned active in the late trading session, helping the the weighted index come off its earlier low and end little changed, they said.
At about noon, Washington increased tariffs on US$34 billion of Chinese goods as previously indicated, while an additional US$16 billion of tariffs are expected.
China responded immediately by imposing retaliatory tariffs on US$34 billion of US imports, with another US$16 billion of duties pending.
“The trade war started as the market had widely anticipated,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said. “Such negative external factors continued to weigh on market sentiment here.”
“Fortunately, after the TAIEX fell below the 10,600-point mark in the morning session, some investors appeared willing to buy at lows by picking up the most important stock, TSMC, to bolster the broader market,” Huang said.
Shares in TSMC, the most heavily weighted stock on the local market, rose 1.17 percent to close at NT$217, from a low of NT$215, with 29.01 million shares changing hands.
A stronger TSMC, which led the bellwether electronics sector to close up 0.52 percent, served as an anchor stabilizing the main board on Friday, Huang said.
Also in the electronics sector, Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, rose 1.43 percent to end at NT$4,605 after the company a day earlier reported better-than-expected sales for last month.
Hon Hai Precision Industry Co (鴻海精密), an iPhone assembler for Apple that is second to TSMC in terms of market value, fell 0.86 percent to close at NT$80.50, but came off an early low of NT$80.20.
Outperforming the broader market, silicon wafer makers attracted buying on the back of rising product prices, with Formosa Sumco Technology Corp (台勝科) shares rising 10 percent, the maximum daily increase, to close at NT$136.
Fears over the trade war between Washington and Beijing took a toll on old economy stocks, dealers said.
Among the falling non-high-tech stocks, Formosa Plastics Corp (台灣塑膠) lost 3.52 percent to close at NT$109.50, Formosa Chemicals & Fibre Corp (台塑化纖) shed 3 percent to end at NT$113 and Nan Ya Plastics Corp (南亞塑膠) fell 1.02 percent to close at NT$87.10.
“Judging from today’s fluctuations, I think the main board saw strong technical support at about 10,500 points,” Huang said. “But even if the TAIEX stages a rebound, the room for an upturn could be limited, as investors are watching carefully how listed companies report their sales for last month.”
Another focal point is a TSMC investor conference on July 19, at which the firm is to release second-quarter results and provide third-quarter guidance and could move the market, Huang said.
Elsewhere in Asia on Friday, stocks rebounded despite the introduction of the US tariffs, which Beijing called the “largest trade war” in economic history.
However, the news had been expected for weeks and many traders took the opportunity to buy into markets that have been under pressure over growing global trade spats, analysts said.
Japanese stocks led the gains, with Tokyo’s Nikkei 225 on Friday rising 241.15 points, or 1.1 percent, to 21,788.14, but falling 2.3 percent from a close of 22,304.51 on June 29.
The Shanghai Composite on Friday rose 13.35 points, or 0.5 percent, to close at 2,747.23, a drop of 3.5 percent from 2,847.42 a week earlier.
Hong Kong’s Hang Seng on Friday gained 133.53 points, or 0.5 percent, to 28,315.62, but was also down 2.2 percent from 28,955.11 on June 29.
News of the tariffs was already priced into the market, Yingda Securities Co (英大證券) analyst Li Daxiao (李大霄) said.
“After the US tariffs announcement, the negative news finally came out and has already been digested over recent weeks. Therefore investors are not in as much of a panic as before, and the market sentiment will reverse,” Li said.
“The impact of tariffs on economic growth appears limited for now, giving the market a breathing spell,” Hong Kong-based Bright Smart Securities International (HK) Ltd’s Stanley Chik said.
However, these could be just the first skirmishes in a trade war between the world’s top two economies, with financial markets worried about a knock-on effect on the wider global economy and the broader trading system.
US President Donald Trump has threatened to impose tariffs on about US$450 billion of Chinese goods — virtually all of China’s exports to the US — as he seeks to advance his “America first” protectionist agenda.
Beijing has accused the US of “firing on the whole world” with the measures, pointing out that most of the Chinese goods under attack are made by companies with large foreign investment — including US firms.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last