Taiwan shares end below 9,200 points, due to futures-led sales
Shares in Taipei plunged Tuesday on futures-led selling after foreign institutional investors kept building up short-position contracts in the futures market, dealers said.
Selling focused on the bellwether electronics sector amid lingering concerns over slowseason effects in the second quarter, while downward pressure also spread to large-cap stocks in the old economy and financial sectors to send the broader market even lower, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed down 176.56 points, or 1.88 percent, at the day’s low of 9,191.87, off an early high of 9,363.52, on turnover of NT$107.75 billion (US$3.46 billion).
The market opened down 0.28 percent in the wake of weakness on Wall Street overnight, and selling escalated with market heavyweights across the board spotlighted, which pushed down the index below 9,200 points at the close, the dealers said.
Fell Below 220-day Moving
“As the local main board fell below the 220-day moving average of 9,326 points in the early session, the market appeared technically fragile,” market analyst Eric Lai said. “It was no surprise that more downward pressure followed to send the index into a tailspin.”
Lai said that investors witnessed the number of net shortposition contracts held by foreign investors in the futures market rising to about 21,000 a day earlier, adding that foreign institutional investors could lead the downturn in the spot market and local retail investors simply followed by selling.
According to the TWSE, foreign institutional investors sold a net NT$3.58 billion- worth of local shares on the main board Tuesday.
“Investor sentiment has been dampened by disappointing export data for May, when electronics exporters suffered a fall in shipments. The export report raised concerns over the impact of the secondquarter slow-season effect,” Lai said.
May Exports Fell 3.8%
In May, Taiwan’s exports fell 3.8 percent from a year earlier, marking the fourth month it had registered a year-on-year fall. Electronics exports fell 4.4 percent from a year earlier and information and communications device exports shed 24.7 percent yearon-year.
Electronics Sector Faced
As a result, Lai said, the bellwether electronics sector faced tremendous selling pressure throughout the session down 2.07 percent.
Smartphone camera l ens maker Largan Precision Co. (
) fell 2.54 percent to close at NT$3,255.00, and Hon Hai Precision Industry Co. ( ), the world’s largest contract electronics supplier, lost 1.79 percent to end at NT$93.20.
Flat panel maker AU Optronics Corp. ( ) shed 7.05 percent to close at NT$14.50, while Taiwan Semiconductor Manufacturing Co. ( ), the most heavily weighted stock in the local market, bucked the downturn, ending the session up 0.36 percent at NT$139.00.
Smartphone vendor HTC Corp. ( ) closed down 10 percent, the maximum daily decline, at NT$ 75.30, after the company warned over the weekend that it could incur almost NT$10 in loss per share for the second quarter.
In the non-high tech sector, Nan Ya Plastics Corp. ( ) fell 1.51 percent to close at NT$71.70, and food maker Uni- President Enterprises Corp. ( ) lost 2.81 percent to end at NT$51.80. Fubon Financial Holding Co. (
) ended down 2.19 percent at NT$62.40.
“It is possible that the local market could fall further, as many investors fear that foreign investors are motivated by a weaker New Taiwan dollar to move their funds out of the country,” Lai said.
An investor looks at the stock price board at a local brokerage in Taipei, yesterday. Shares in Taipei yesterday took a plunge.