The TAIEX yesterday closed lower after posting early gains because of mounting diplomatic tensions between the US and China, dealers said.
Selling was seen across the board except in the semiconductor sector, which managed to hold its own, led by the nation’s two top pure foundry plays, preventing the broader market from falling further, they said.
The TAIEX closed down 109 points, or 0.88 percent, at 12,304.04 on turnover of NT$264.547 billion (US$8.95 billion).
Photo: Wang Meng-lun, Taipei Times
The benchmark index opened up 0.44 percent and rose to the day’s high just before 10:30am on a technical rebound from a session earlier, when it closed down 0.48 percent, dealers said.
However, the upturn was ended by mounting US-China tensions, which pushed the index below the nearest technical support level ahead of the five-day moving average of 12,352.
Investors were reacting to Beijing ordering the US consulate in Chengdu to be closed in retaliation for the US ordering the closure of China’s consulate in Houston, Texas, on Wednesday.
“China’s retaliatory move complicated the political landscape between the two powers,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said. “Many investors fear the Chinese yuan will weaken and send other regional currencies into a tailspin, leading to a fund outflow from the region.”
“Taiwan was not the only market to feel the pinch. Selling emerged across the region today,” Huang said, referring to the stock markets in Shanghai, Shenzhen, Hong Kong and Seoul.
In Taipei, many investors seized on the political unease as an excuse to lock in gains after the TAIEX closed at a 30-year high earlier this week.
“The silver lining was that the semiconductor sector served as an anchor to prevent further losses, led by contract chipmaker Taiwan Semiconductor Manufacturing Co [TSMC, 台積電] and its smaller rival United Microelectronics Corp [UMC, 聯電],” Huang said.
TSMC shares rose 1.18 percent to close at NT$386, off a high of NT$395, while UMC shares gained 2.6 percent to close at NT$19.75 after hitting a high of NT$20.30.
Chip designer MediaTek Inc (聯發科) lost 0.3 percent to close at NT$675, smartphone camera lens maker Largan Precision Co (大立光) dropped 1.94 percent to close at NT$3,800 and iPhone assembler Hon Hai Precision Industry Co (鴻海精密) shed 2.56 percent to close at NT$80.
Among falling old economy stocks, Far Eastern New Century Corp (遠東新世紀) lost 2.67 percent to close at NT$29.20, Formosa Chemicals & Fibre Corp (台灣化纖) fell 1.13 percent to close at NT$69.80 and Uni-President Enterprises Corp (統一企業) dropped 0.97 percent to close at NT$71.30.
In the financial sector, which ended down 1.16 percent, Fubon Financial Holding Co (富邦金控) lost 1.64 percent to close at NT$42 and Mega Financial Holding Co (兆豐金控) fell 1.68 percent to NT$32.15.
“Politics is dominating global markets, and if things get worse and hurt foreign institutional investor sentiment, further volatility is possible,” Huang said. “The TAIEX may not see strong technical support until 12,097, the 20-day moving average.”
Foreign institutional investors yesterday sold a net NT$10.83 billion of shares, Taiwan Stock Exchange data showed.
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