Shares in Taiwan closed slightly lower yesterday as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure, pushing down the broader market, dealers said.
However, old-economy stocks in the cement, food and petrochemical sectors, as well as financial stocks, appeared resilient, which helped the broader market cap the downturn, although the main board still fell below 9,800 points by the end of the session, dealers said.
Turnover remained moderate as many investors remained on the sidelines, waiting for the outcome of the local government elections on Saturday next week and to see how trade tensions between the US and China develop, they said.
The TAIEX ended down 29.37 points, or 0.3 percent, at 9,797.09, on turnover of NT$116.244 billion (US$3.76 billion).
The market opened down 7.41 points on a mild technical correction from a session earlier, and soon regained its footing to move higher on the back of gains posted on the US market, where the Dow Jones Industrial Average closed up 0.83 percent and the tech-heavy NASDAQ ended up 1.72 percent overnight.
However, after the TAIEX breached 9,800 points, selling set in, with TSMC — the most heavily weighted stock in the local market — in focus amid worries about the chipmaker’s sales due to a weakening bitcoin, which could hurt global demand for cryptocurrency mining devices, dealers said.
“Mining devices account for about 10 percent of TSMC’s total sales,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “The latest bitcoin decline has renewed concerns over TSMC’s sales.”
Bitcoin fell below the US$6,000 mark overnight to its lowest level since October last year.
TSMC fell 2.16 percent to close at NT$226, with 46.74 million shares changing hands.
Led by TSMC, the bellwether electronics sector fell 0.97 percent and the semiconductor sub-index ended down 1.96 percent.
IC designer MediaTek Inc (聯發科) shed 4.97 percent to close at NT$220; Yageo Corp (國巨), a provider of passive components such as chip resistors and inductors, fell 0.64 percent to end at NT$310; and iPhone assembler Hon Hai Precision Industry Co (鴻海精密) lost 0.27 percent to end at NT$74.3.
Bucking the downturn, smartphone camera lens supplier Largan Precision Co (大立光) gained 1.13 percent to close at NT$3,130.
“Fortunately, some bargain hunting in the non-tech sector offset the impact resulting from the weakness of the electronics sector,” Su said. “So the market remained in a narrow range, moving around 9,800 points throughout the session.”
Among the gaining old-economy stocks, Formosa Petrochemical Corp (台塑石化) rose 0.9 percent to close at NT$112; food and beverage conglomerate Uni-President Enterprises Corp (統一企業) added 1.63 percent to end at NT$74.8; and Asia Cement Corp (亞泥) rose 1.65 percent to close at NT$33.95.
In the financial sector, which closed up 0.34 percent, CTBC Financial Holding Co (中信金控) gained 1.93 percent to close at NT$21.1 and Mega Financial Holding Co (兆豐金控) rose 0.38 percent to end at NT$26.5.
"As in recent sessions, trading volume remained thin today as market sentiment was still bothered by the Washington-Beijing trade dispute," Su said. "Investors are waiting for the upcoming G20 meeting in Argentina, where US President Donald Trump and Chinese President Xi Jinping (習近平) are expected to meet."
"Moreover, next week's local government elections have created uncertainty, the last thing the financial market wants," Su said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$640 million-worth of shares on the main board yesterday.
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