Local shares backpedal over concerns from the Greek debt conundrum
Shares in Taiwan pulled back Friday from the gains posted a session earlier as investors were discouraged by a sliding Wall Street trend overnight amid concerns over the debt problems in Greece, dealers said.
The bellwether electronics sector encountered selling throughout the session, led by high-priced stocks, such as the smartphone camera lens supplier Largan Precision Co. ( ), while select Apple Inc.’s suppliers and semiconductor stocks appeared resilient to lend support to the sector, they said.
Bargain hunters focused on certain non-high tech stocks, in particular in the food and financial sectors, by taking advantage of these stocks’ relatively low valuations after recent consolidation, they added.
The weighted index on the Taiwan Stock Exchange closed down 13.77 points, or 0.14 percent, at 9,462.57, after moving between 9,442.94 and 9,487.29, on turnover of NT$83.59 billion (US$2.71 billion).
The market opened up 1.54 points and rose to the day’s high on follow-through buying from Thursday, but many investors appeared reluctant to chase prices, a move which dragged down the index with selling focusing on electronics stocks, dealers said. The index moved below the previous close for the rest of the session they said.
“The debt situation in the eurozone still weighed on investor sentiment in the global financial markets,” Ta Ching Securities analyst Andy Hsu, referring to the further losses on Wall Street overnight and a retreat suffered by several major markets in the region.
Greece and its creditors failed to reach an agreement overnight after its reform proposal had been rejected earlier this week. Investors in the global market are watching closely how another meeting on the Greek loans scheduled for Saturday will proceed ahead of the June 30 debt payment deadline with worries over a default looming.
“So, Taiwan was no exception as investors here locked in the gains they posted a session earlier,” Hsu said.
Hsu said that as Largan and other high- priced stocks trended lower, it was not surprising that the local high-tech sector weakened, affecting the broader market. Largan, the most expensive stock in the local market, fell 1.51 percent to close at NT$3,585.00 after the stock hit a fresh closing high of NT$3,640.00 Thursday.
“The losses incurred by Largan were simply technical in nature. Many investors have high hopes that the company will benefit from an increase in orders to be placed by Apple,” Hsu said. The market has been expecting that Largan will post NT$ 160- 170 in earnings per share for 2015, up from NT$144.85 recorded in 2014.
Among other falling electronics stocks, integrated circuit designer MediaTek Inc. ( ) lost 1.73 percent to end at NT$425.00, and Taiwan Semiconductor Manufacturing Co. ( ), the most weighted stock in the local market, closed down 0.34 percent at NT$146.00.
Bucking the downturn of the electronics sector, Hon Hai Precision Industry Co. ( ), an assembler of iPhones and iPads, rose 0.20 percent to close at NT$99.20, and IC packaging and testing services provider Advanced Semiconductor Engineering Inc. ( ) rose 0.81 percent to end at NT$43.30.
In the non-high tech sector, Standard Foods Corp. ( ) rose 2.80 percent to close at NT$88.00, and textile maker Far Eastern New Century Corp. ( ) added 0.31 percent to end at NT$32.75. Cathay Financial Holding Co. (
) closed up 0.92 percent to NT$54.90.
“The local main board is faced with stiff technical resistance ahead of 9,500 points. I do not think the hurdles will be easily jumped over soon,” Hsu said.