TAIEX ends below 9,900 points, electronics shares slide
Shares in Taiwan ended below the 9,900-point mark Wednesday as the bellwether electronics sector came under pressure on worsethan-expected first quarter results and disappointing outlooks for the second quarter, dealers said.
The financial sector also suffered a sell- off as investors rushed to lock in gains they built in recent sessions, further dragging down the index at the close, they said.
Market sentiment turned cautious as many investors preferred to stay on the sidelines before the U. S. Federal Reserve was to wrap up a two- day policymaking meeting later in the day, they added.
The weighted index on the Taiwan Stock Exchange closed down 103.00 points, or 1.03 percent, at 9,853.83, after moving between 9,842.50 and 9.978.87, on turnover of NT$113.76 billion (US$3.73 billion).
Electronics Shares Facing
The market opened down 0.29 percent as metal casing maker Catcher Technology Co. ( ) faced a sell-off on disappointing first quarter results and smartphone vendor HTC Corp. ( ) came under pressure on disappointing guidance for the second quarter, dealers said.
Selling then extended to other high-tech stocks amid concerns that a strong Taiwan dollar will affect the electronics sector’s bottom line. The downward pressure even dragged down the financial sector to pull the broader market below 9,900 points, they said.
“After the market’s strong showing in the past few sessions, investors simply seized on the earnings reports as an excuse to pocket their gains,” Concord Securities analyst Kerry Huang said.
“With the index repeatedly breaching the 10,000-point level but failing to close above that level, it’s no surprise that the local bourse will need some time to consolidate before posting more gains,” Huang said.
Catcher Fell 7%
In the electronics sector, which closed down 1.71 percent, Catcher fell 7 percent, the maximum daily decline, to end at NT$350.00, with 13.12 million shares changing hands.
The stock plunged to the day’s low early in the session and its weakness continued to the end after it announced that it posted NT$6.04 in earnings per share (EPS) for the first quarter, lower than a market consensus of NT$6.2.
“After today’s sell-off, shares of Catcher, a supplier to Apple Inc., have turned technically weaker. Caution over its performance in the second quarter could trigger more selling until the stock moves closer to the nearest technical support of NT$325-NT$330,” Huang said.
Selling in Catcher also affected other Apple suppliers. Hon Hai Precision Industry Co. ( ), the iPhone and iPad assembler, lost 1.60 percent to close at NT$92.10, and smartphone camera lens maker Largan Precision Co. (
) closed 2.50 percent lower at NT$3,120.00.
HTC lost 5.70 percent to close at NT$124.00 after the smartphone vendor forecast its EPS for the second quarter at between NT$0.06 and NT$0.34, much lower than a forecast of NT$1.89 by foreign brokerages.
Fears on New Taiwan Dollar’s
“In addition to the disappointing results, investors have fears that the New Taiwan dollar’s appreciation will have an adverse impact on the export-oriented electronics sector,” Huang said.
The financial sector closed down 1.07 percent, with Cathay Financial Holding Co. ( ) sliding 1.62 percent to end at NT$54.60 and Mega Financial Holding Co. (
) falling 1.25 percent to close at NT$27.70.
“The Fed’s meeting has turned many investors away from the market,” Huang said. “We have to pay close attention to the Fed’s comments on the economic climate for more clues about when it will raise interest rates.”
A man is seen sitting in front of stock indicators at a brokerage in Taipei, yesterday. The local market closes down 103 points yesterday. The weighted index on the Taiwan Stock Exchange ended up at 9853.83 points on turnover of NT$113.76 billion (US$3.73 billion).