Tai­wan shares end be­low 9,200 points, due to fu­tures-led sales

The China Post - - TAIWAN BUSINESS -

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

Av­er­age

“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

Sell­ing Pres­sure

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.

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CNA

An in­vestor looks at the stock price board at a lo­cal bro­ker­age in Taipei, yes­ter­day. Shares in Taipei yes­ter­day took a plunge.

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