TAIEX shares can’t man­age re­bound af­ter pre­vi­ous sell-off

The China Post - - TAIWAN BUSINESS -

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

Frag­ile: An­a­lyst

“The

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.

Fi­nan­cial Sec­tor

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.

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