The TAIEX yesterday closed slightly lower after giving up early gains ahead of the nearest technical resistance at about 10,600 points, as investors shrugged off a rally on US markets on Friday last week, dealers said.
The bellwether electronics sector entered consolidation mode, with contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in the doldrums, while the selling of petrochemical shares put pressure on the broader market amid a weakening global energy market, they said.
The TAIEX closed down 10.33 points, or 0.1 percent, at 10,586.71, on turnover of NT$133.668 billion (US$4.44 billion).
Foreign institutional investors bought a net NT$209.14 million of shares, Taiwan Stock Exchange data showed.
“After the TAIEX’s significant gains in recent sessions, many investors grew cautious about a possible technical pullback,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said.
“The technical hurdles ahead of 10,600 points are high, so many investors preferred to stay on the sidelines,” Huang said, pointing to the relatively low turnover.
In a mild technical correction, TSMC shares fell 0.82 percent to close at NT$304, while the electronics subindex closed down 0.15 percent.
“With TSMC in consolidation mode, it was hard for the electronics sector and the main board to break the stagnation,” Huang said.
Amid lingering concerns over global demand for crude oil during the COVID-19 pandemic, the petrochemical sector suffered, with Formosa Petrochemical Corp (台塑石化) shares falling 1.09 percent to close at NT$81.7 and Formosa Chemicals & Fibre Corp (台灣化纖) shares dropping 1.13 percent to close at NT$70.3.
In the financial sector, which fell 0.65 percent in the wake of interest rate cuts by major central banks, CTBC Financial Holding Co (中信金控) shares closed 1.53 percent lower at NT$19.3, Fubon Financial Holding Co (富邦金控) shares fell 1.23 percent to NT$40.1 and Cathay Financial Holding Co (國泰金控) shares edged 0.52 percent lower to NT$38.
While investors remained concerned by COVID-19, so-called “anti-epidemic” shares continued to climb, dealers said.
Among them, shares of KNH Enterprise Co Ltd (康那香), a manufacturer of nonwoven fabric for mask production, rose 2.15 percent to close at NT$19, while those of mask supplier Universal Inc (恆大) gained 1.9 percent to close at NT$54.9.
“In addition to the virus pandemic, investors had better pay close attention to the current earnings season in Taiwan and the US, which is expected to move the equity market,” Huang said.
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