TAIEX shares can’t manage rebound after previous sell-off
Shares in Taiwan remained in the doldrums on Friday and edged slightly lower as large-cap stocks, in particular in the bellwether electronics sector, were unable to generate any positive momentum, dealers said.
Select stocks in the financial sector attracted bargain hunting to outperform the broader market, lending some support to the index at a time when many investors were alert to the possibility of more selling by foreign institutional investors, they said.
The weighted index on the Taiwan Stock Exchange ended down 8.50 points, or 0.09 percent, at 9,340.13, after ranging between 9,272.94 and 9,371.41 on turnover of NT$110.06 billion (US$3.56 billion).
The market opened down 0.26 percent on follow-through selling from Thursday, when the weighted index plunged 2.17 percent, and then bounced back to some extent before selling re-emerged to push down the index again, dealers said.
Once the index fell below 9,300 points, however, some bargain hunters turned active, helping the market recoup some of its earlier losses at the close, they said.
“After yesterday’s shock, market sentiment has been badly hurt,” MasterLink Securities analyst Tom Tang said.
Market Becomes Technically
local equity market has become technically fragile and it was no surprise that the weakness continued today after foreign institutional investors built up a large number of short position contracts in the futures market,” Tang said.
“Despite bargain hunting seen late in the session, the market could continue falling in the near future to the next technical support level at around 9,200 points,” the analyst said.
The ongoing slump of large-cap high-tech stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC, ), indicated that foreign institutional investors were still dumping shares on Friday after an active Thursday, Tang said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$9.93 billion worth of local shares on the main board Friday after a net sell of NT$13.07 billion on Thursday.
TSMC, t he most heavily weighted stock in the local market, fell 0.71 percent to close at NT$140.00, and flat panel maker AU Optronics Corp. ( ) lost 1.27 percent to end at NT$15.60.
Competition from China
Bucking the downturn on the broader market, smartphone camera lens supplier Largan Precision Co. ( ) staged a technical rebound, gaining 1.56 percent to close at NT$3,255.00 after a 7.24 percent fall seen on Thursday.
“I think the electronics sector will continue to face downside risks amid escalating concerns over competition from China, which is gearing up to build its own high-tech supply chain and pose a major threat to Taiwan,” Tang said.
In the financial sector, which closed up 0.38 percent, Fubon Financial Holding Co. ( ) rose 1.95 percent to close at NT$62.70 and CTBC Financial Holding Co. ( ) added 1.30 percent to end at NT$23.45.
“The financial sector’s rebound showed optimism that major financial holding companies, like Fubon Financial, will report better earnings this year” at a time when interest rates are set to move higher, Tang said.