Local shares on Friday moved lower in consolidation mode as investors locked in their gains from the previous session based on the mixed performance of US markets overnight, dealers said.
Turnover fell as many investors stayed on the sidelines, waiting to see what the US and China would decide in a written trade agreement next month, they said.
The TAIEX on Friday ended down 24.02 points, or 0.21 percent, at 11,296.12, after moving between 11,281.37 and 11,347.18, on turnover of NT$128.83 billion (US$4.21 billion). That was a 1 percent increase from a close of 11,180.22 on Oct. 18.
The market opened up 0.15 percent, breaching 11,300 points, and moved to the day’s high on follow-through buying from the previous session, but selling soon emerged, focusing on large-cap stocks, in particular those in the supply chain of Apple Inc, dealers said.
Old-economy and financial stocks generally fell, but contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came off an early low to lend some support to the broader market by the end of the session, they said.
“After the recent strong showing, it was no surprise that the main board entered consolidation mode today,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “Today’s selling largely came after the mixed performance on the US markets overnight.”
On Thursday, the Dow Jones Industrial Average closed down 0.11 percent and the S&P 500 ended up 0.19 percent after major corporations such as 3M Co and Microsoft Corp reported mixed earnings.
The selling on the TAIEX on Friday was tolerable, as the market remained awash in liquidity as foreign institutional investors continued to buy into local stocks, Su said.
“The TAIEX still managed to stay above the five-day moving average of 11,262 points, so technically, the main board remained healthy,” he said.
Foreign institutional investors bought a net NT$3.30 billion of shares on the main board, marking the ninth consecutive session of a net purchase, Taiwan Stock Exchange data showed.
Investors pocketed their gains from select “Apple concept stocks,” which had climbed sharply in recent sessions on better-than-expected sales of the new iPhone 11 series that went on sale globally last month, Su said.
Among the Apple concept stocks, Largan Precision Co (大立光), a smartphone camera lens supplier, fell 1.81 percent to close at NT$4,350 and its smaller rival Genius Electronic Optical Co (玉晶光) lost 1.98 percent to end at NT$446, while iPhone assembler Hon Hai Precision Industry Co (鴻海精密) dropped 0.37 percent to close at NT$80.20.
The profit-taking also spread to other tech stocks, with IC designer MediaTek Inc (聯發科) falling 0.66 percent to end at NT$379 and PC maker Asustek Computer Inc (華碩電腦) dropping 1.18 percent to close at NT$209.
“However, TSMC bounced back from its early losses to close higher, which cushioned the fall of the TAIEX,” Su said.
“The buying in TSMC might have come from foreign institutional investors, who wanted to park their money in a leading company in the global semiconductor industry,” he said.
TSMC, the most heavily weighted stock on the local market, rose 0.17 percent to end at NT$293.50, off an early low of NT$292.50, with 22.64 million shares changing hands.
At an investors’ conference earlier this month, TSMC forecast a 9 percent sequential increase in its fourth-quarter sales.
Old-economy and financial stocks moved lower as investors were cautious about the US markets during the ongoing earnings season, Su said.
Among the falling old-economy stocks, Asia Cement Corp (亞洲水泥) dropped 0.57 percent to close at NT$43.70, Formosa Chemicals & Fibre Corp (台灣化纖) lost 0.67 percent to end at NT$88.80 and Nan Ya Plastics Corp (南亞塑膠) shed 0.97 percent to close at NT$71.40.
In the financial sector, which closed down 0.05 percent, Cathay Financial Holding Co (國泰金控) lost 0.36 percent to end at NT$41 and CTBC Financial Holding Co (中信金控) fell 0.47 percent to close at NT$21.05.
“In addition to the current earnings season, investor sentiment remained bothered by the Washington-Beijing trade disputes,” Su said.
“While both sides are likely to sign a trade agreement next month after their first phase of the trade talks earlier this month, investors are anxiously waiting to see the contents of the trade pact,” he said.
Meanwhile, Tokyo’s benchmark Nikkei 225 rose to a one-year high, supported by a relatively cheap yen and after some US indices finished higher.
The Nikkei 225 on Friday gained 49.21 points, or 0.2 percent, to close at 22,799.81, rising for a fifth straight session and adding 1.4 percent from 22,492.68 on Oct. 18.
The broader TOPIX was on Friday up 4.70 points, or 0.3 percent, at 1,648.44, increasing 1.6 percent from a week earlier.
“The yen has been stable in recent sessions, and even though the Dow ended down in New York, the NASDAQ and S&P 500 finished higher, so that’s a tailwind for Japanese shares,” SBI Securities investment research head Hideyuki Suzuki said.
Investors are watching corporate earnings reports, but “they are not very worried,” he said.
They are also taking relief from key central banks, including the US Federal Reserve and the European Central Bank, remaining dovish over monetary policy, he added.
“The market is slightly overheating, but buying sentiment remains strong due to hope for additional fiscal measures by the Japanese government,” IwaiCosmo Securities Co Ltd broker Toshikazu Horiuchi said.
“While cashing in on the recent gains, investors are picking individual shares showing a positive performance in earnings,” Horiuchi said.
Among major shares in Tokyo, chipmaking equipment manufacturer Tokyo Electron Ltd jumped 2.55 percent to ￥21,880, while precision and electronic parts maker Nidec Corp rose 2.93 percent to ￥15,935.
Sony Corp, which is to announce its first-half earnings next week, lost 0.41 percent to ￥6,314.
In Hong Kong, stocks fell to end a broadly positive week on a negative note, with investors looking for developments in the Brexit saga and US-China trade talks.
The Hang Seng on Friday dropped 130.56 points, or 0.49 percent, to 26,667.39, shedding 0.2 percent from a close of 26,719.58 on Oct. 18.
However, the benchmark Shanghai Composite on Friday added 14.01 points, or 0.48 percent, to close at 2,954.93, gaining 0.6 percent from 2,938.14 a week earlier.
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