TAIEX shares end lower amid caution on May sales data
Shares in Taiwan closed lower Tuesday after moving in a narrow range as many investors remained cautious before high- tech heavyweights released their May sales data, dealers said.
Taiwan Semiconductor Manufacturing Co. (TSMC, ) stayed below the previous closing level throughout the trading session amid concerns that a deal for Intel Corp. to acquire smaller rival Altera Corp. will lead Altera to shift its orders with TSMC to Intel, the dealers said.
While the bellwether electronics sector remained slow, bargain hunters set their sights on select old economy stocks, in particular in the food and petrochemical sectors, lending some support to the broader market, the dealers added.
The weighted index on the Taiwan Stock Exchange ended down 11.43 points, or 0.11 percent, at 9,614.26, after moving between 9,584.56 and 9,657.02, on turnover of NT$98.82 billion ( US$ 3.20 billion).
The market opened down 9.17 points and fell to the day’s low on follow-through selling from a session earlier, but with the index briefly fall- ing 9,600 points, the bourse staged a mild rebound before selling reemerged in the latter part of the session to push down share prices into the red by the close, the dealers said.
“The local market remained in consolidation mode as many investors who wanted to figure out the impact from the wider daily stock price fluctuations took to the sidelines,” analyst Vickie Hsieh said. Since Monday, the maximum daily upward and downward limits have been raised to 10 percent from 7 percent.
“The current May sales reporting period (ending June 10) has made investors more cautious amid fears that the high tech sector will report poor revenue reports during the current slow season,” Hsieh said.
Electronics Sub- index
The electronics sub- index closed down 0.12 percent. TSMC, the most weighted stock in the local market, fell 0.69 percent to end at NT$144.00 with 33.41 million shares changing hands. In addition to the Intel- Altera deal, TSMC shares were impacted by worries over its consolidated sales for the current quarter and even for the third quarter. Integrated circuit designer MediaTek Inc. ( ) closed unchanged at NT$ 410.00, while smartphone vendor HTC Corp. (
) staged a technical rebound from Monday’s losses, up 0.51 percent to end at NT$98.50, after the company said it will consider a share buyback program to support its share price.
COMPUTEX Boosts Demand
However, downward pressure in the electronics sector seemed limited as investors had high hopes that the ongoing COMPUTEX Taipei, the second-largest computer show in the world, will unveil innovations to boost demand, Hsieh said.
“As the high tech sector appeared sluggish, investors sought targets in the old economy sector by taking advantage of their relatively low valuations,” Hsieh said.
Among the gaining traditional industrial stocks, Formosa Plastics Corp. ( ) gained 1.34 percent to close at NT$ 73.10 and Nan Ya Plastics Corp. ( ) added 1.34 percent to end at NT$ 75.70, while food maker Uni- President Enterprises Corp. rose 1.67 percent to 54.80 on hopes of higher beverage sales during the summer period.