Shares weaken ahead of Fed meet­ing con­clu­sion

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan ex­tended losses Wed­nes­day from a ses­sion ear­lier amid cau­tious sen­ti­ment be­fore the U.S. Fed­eral Re­serve wraps up its two-day pol­i­cy­mak­ing meet­ing later in the day, deal­ers said.

Selling pres­sure largely fo­cused on old econ­omy stocks as in­vestors pock­eted their gains seen in re­cent ses­sions, while the bell­wether elec­tron­ics sec­tor ap­peared re­silient, lend­ing some sup­port to the broader mar­ket, they said.

The weighted in­dex on the Tai­wan Stock Ex­change closed down 22.95 points, or 0.24 per­cent, at 9,189.83, af­ter mov­ing be­tween 9,170.09 and 9,242.22, on turnover of NT$91.60 bil­lion (US$2.95 bil­lion).

The mar­ket opened up 0.25 per­cent in the wake of the gains posted on Wall Street overnight, but re­mained in con­sol­i­da­tion mode through­out the ses­sion with buy­ing in large- cap, high- tech stocks off­set­ting selling in old econ­omy stocks, deal­ers said.

“Be­fore the Fed con­cludes the pol­i­cy­mak­ing meet­ing later to­day, it was no sur­prise that the lo­cal eq­uity mar­ket was dom­i­nated by cau­tion to trade in a nar­row range through­out the ses­sion,” Mega In­ter­na­tional In­vest­ment Ser­vices Corp. an­a­lyst Alex Huang said.

Con­cern on Fed’s In­ter­est Rate

While the mar­ket has widely an­tic­i­pated that the Fed will kick off an in­ter­est rate hike cy­cle in Septem­ber at the ear­li­est, “few wanted to take risks for the mo­ment. Many in­vestors sim­ply cut their hold­ings,” Huang said.

The an­a­lyst said that as for­eign in­sti­tu­tional in­vestors main­tained a large num­ber of net short­po­si­tion con­tracts in the fu­tures mar­ket Tues­day, fu­tures-driven selling served as the cul­prit for the latest mar­ket down­turn Wed­nes­day.

“The sil­ver lin­ing was that elec­tron­ics heavy­weights, in par­tic­u­lar semi­con­duc­tor stocks, man­aged them­selves well above the pre­vi­ous close. Oth­er­wise, the weighted in­dex could have fallen fur­ther to­day,” Huang said.

Elec­tron­ics Sec­tor

The elec­tron­ics sec­tor closed up 0.29 per­cent, and the semi­con­duc­tor sub-in­dex ended up 0.49 per­cent.

Con­tract chip- maker Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. ( ), the most heav­ily weighted stock in the lo­cal mar­ket, rose 0.35 per­cent to close at NT$142.50, and in­te­grated cir­cuit de­signer Me­di­aTek Inc. (

) added 2.91 per­cent to end at NT$424.50.

Smart­phone cam­era lens sup­plier Lar­gan Pre­ci­sion Co. (

) gained 1.82 per­cent to close at NT$3,360,00 to re­main the most ex­pen­sive stock in Tai­wan, while flat panel maker In­nolux Corp. ( ) rose 3.72 per­cent to end at NT$16.75 on late ses­sion bar­gain hunt­ing.

Other Sec­tors

Among the los­ing old econ­omy stocks, car ven­dor Yu­lon Mo­tor Co. ( ) fell 2.31 per­cent to close at NT$36.00, Nan Ya Plas­tics Corp. ( ) lost 1.55 per­cent to end at NT$70.00, and food maker Uni-Pres­i­dent En­ter­prises Corp. ( ) closed down 1.50 per­cent at NT$52.50.

“While keep­ing a close eye on the Fed’s meet­ing, in­vestors should also re­main alert over the debt prob­lems in Greece, which could move the global fi­nan­cial mar­kets,” Huang said. He said that the lo­cal in­dex is ex­pected to move be­tween 9,100 points and 9,300 points in the near fu­ture.

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