Taipei, Oct. 17 (CNA) Shares in Taiwan pulled back Tuesday, led by the semiconductor sector, as investors shrugged off new highs on Wall Street overnight to lock in gains built in recent sessions, dealers said.
Caution dominated the session ahead of an investor conference scheduled by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) for Thursday, with investors preferring to pocket their money before the tech giant gives sales guidance for the fourth quarter, the dealers said.
The weighted index on the Taiwan Stock Exchange closed down 51.06 points, or 0.47 percent, at the day’s low of 10,723.15, off an early high of 10,798.52, on turnover of NT$118.85 billion (US$3.94 billion).
The market opened up 0.15 percent on follow-through buying from a session earlier in reflection of new highs posted by the Dow Jones Industrial Average, the S&P 500 index, and the tech-heavy NASADQ index overnight, the dealers said.
With the weighted index moving closer to 10,800 points, selling set in, focusing on the high-tech sector, in particular in semiconductor stocks led by TSMC, to push the broader market into negative territory, with the weakness continuing into the end of the session, they said.
“The main board made a strong showing in recent sessions. So the weighted index has faced stiff technical resistance, in particular after breaching 10,700 points,” Mega International Investment Services Corp. analyst Alex Huang said.
Before the weighted index ended up 0.47 percent a day earlier, the main board gained 1.82 percent last week.
“Investors here tended to ignore the highs on Wall Street overnight for the moment, fearing that a major pullback will come soon, since valuations at home and in the U.S. market have been high,” Huang said.
Huang said investors rushed to take profits from gains posted by TSMC, shares of which rose almost 6 percent last week, using caution ahead of its investor conference as a cause to sell.
TSMC, the most heavily weighted stock in the local market, fell 1.05 percent to close at NT$235.50. Led by TSMC’s downturn, the bellwether electronics sector closed down 0.77 percent and the semiconductor sub-index ended down 1.16 percent.
“TSMC’s investor conference is critical to the market movement as investors are eager to know how the chip giant perceives the fourth quarter at a time when concerns over shipments of the latest iPhones,” Huang said. TSMC is believed to supply the A11 processor for new iPhone production.
TSMC’s selling spread to other integrated circuit stocks. Among them, IC designer MediaTek Inc. (聯發科) lost 1.53 percent to close at NT$321.00, and IC packaging and testing services provider Advanced Semiconductor Engineering Inc. (日月光) fell 0.92 percent to end at NT$37.60.
“The silver lining was that Hon Hai Precision Industry Co. (鴻海) attracted some bargain hunting after consolidation, which lent some support to the broader market,” Huang said.
Hon Hai, an iPhone assembler that is second to TSMC in terms of market capitalization, rose 0.91 percent to close at NT$110.50.
Also bucking the downturn on the broader market, Neo Solar Power Corp. (新日光), Gintech Energy Corp. (昱晶) and Solartech Energy Corp. (昇陽光電) moved sharply upward after the three announced a merger deal the previous day to form the largest solar cell producer.
Neo Solar gained 8.92 percent to close at NT$17.10, while Gintech Energy and Solartech Energy soared 10 percent, the maximum daily increase, to end at NT$19.35 and NT$14.85, respectively.
The financial sector appeared resilient, closing up 0.27 percent, with Cathay Financial Holding Co. (國泰金) up 0.61 percent to close at NT$49.70 and Mega Financial Holding Co. (兆豐金) up 0.63 percent to end at NT$24.15.
