Sun, Jan 06, 2019 - Page 14 News List

TAIEX extends fall on Apple sales cut

RIPPLE EFFECT:Concord Securities analyst Kerry Huang said that investors should beware negative leads that could cause volatility in share prices in the short term

Staff writer, with CNA and AP

Local shares on Friday continued to tumble as the TAIEX fell more than 100 points to close below 9,400 on a sell-off of heavyweight suppliers to Apple Inc, dealers said.

The selling came as investors remained concerned over Apple’s cut in its first-quarter sales guidance based on slower-than-expected sales of the latest iPhones, pulling down the bellwether electronics sector, they said.

The weighted index on Friday closed down 109.91 points, or 1.16 percent, at 9,382.51, after moving between 9,319.28 and 9,427.24, on turnover of NT$105.98 billion (US$3.43 billion). That was a 3.5 percent plunge from a close of 9,727.41 on Dec. 28.

The market opened down 0.68 percent on follow-through selling from Thursday, when the TAIEX ended down 0.65 percent, reflecting a 2.83 percent decline in the Dow Jones Industrial Average and a nearly 10 percent plunge in Apple shares overnight, dealers said.

Selling later accelerated as investors dumped more of their holdings in large-cap tech stocks, especially those in the Apple supply chain, to push the broader market below 9,400 by the end of the session, they said.

“Apple’s cut in its sales forecast made many investors wary,” Concord Securities Co (康和證券) analyst Kerry Huang said. “The market is worried that Apple’s sales forecast downgrade is just a beginning and more tech firms will follow suit at a time of weak global demand.”

On Wednesday, Apple said that its first-quarter sales could total US$84 billion, down from an earlier estimate of US$89 billion to US$93 billion, citing weaker-than-expected demand in China.

“That’s why losses among big Apple concept stocks here continued from a session earlier, sending the TAIEX lower by more than 100 points,” Huang said on Friday. “I expect selling largely came from foreign institutional investors.”

Foreign institutional investors sold a net NT$9.29 billion in shares, Taiwan Stock Exchange data showed.

Among the falling suppliers, contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), the most heavily weighted stock on the local market, fell 3.48 percent to close at NT$205, with 65.87 million shares changing hands.

The chipmaker’s losses alone dragged the TAIEX down by about 75 points and pushed down the electronics sector by 2 percent.

Hon Hai Precision Industry Co (鴻海), an assembler of iPhones, lost 1.89 percent to close at NT$67.60 and Largan Precision Co (大立光), a smartphone camera lens supplier to Apple, shed 4.13 percent to end at NT$2,905.

Outperforming the broader market, flat-panel maker Innolux Corp (群創) gained 0.62 percent to close at NT$9.50 and rival AU Optronics Corp (友達光電) ended unchanged at NT$11.90.

In the financial sector, which closed down 0.74 percent, Cathay Financial Holding Co (國泰金控) fell 1.33 percent to end at NT$44.55 and Fubon Financial Holding Co (富邦金控) lost 1.09 percent to close at NT$45.30 on concerns the local insurance industry could report bigger-than-expected foreign exchange losses.

“With a weakening tech sector, investors parked their funds in select old economy stocks as a safe haven,” Huang said.

In the food sector, chicken providers Charoen Pokphand Enterprise (Taiwan) Co (台灣卜蜂) gained 0.73 percent to close at NT$55.50 and Great Wall Enterprise Co Ltd (大成) rose 2.05 percent to end at NT$34.80 amid worries over African swine fever, which affects pigs.

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