Taipei, May 10 (CNA) Shares in Taiwan closed slightly lower Friday after the market reacted to the United States’ increase of punitive tariffs on US$200 billion worth of imported Chinese goods that took effect at noon Taipei time, dealers said.
The bellwether electronics sector led the downturn, but some investors parked their funds in select old economy and financial stocks to lend some support to the broader market, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 20.68 points, or 0.19 percent, at 10,712.99, after moving between 10,669.39 and 10,834.69. Turnover was NT$124.49 billion (US$4.03 billion).
The market opened up 0.17 percent and rose to the day’s high at around 10 a.m. on a technical rebound from a session earlier, when the Taiex ended down 1.74 percent because of the ongoing trade friction between the U.S. and China, dealers said.
But with the Taiex surpassing the 10,800-point mark and the increase in punitive tariffs on imported Chinese goods from 10 percent to 25 percent taking effect, selling set in to pull the market into negative territory before some late buying limited the losses, they said.
“The earlier gains were simply technical in nature from the plunge a session earlier,” Hua Nan Securities analyst Kevin Su said.
“Concerns over the global trade issue still dictated market sentiment, in particular the implementation of the 25 percent tariffs.”
The U.S. announced it would carry out the tariff increase against China, effective from 12:01 a.m. Friday Washington time, after the first day of the latest round of trade talks in Washington on Thursday did not yield satisfactory results.
“We have to pay close attention to how the ongoing trade talks will proceed after the negotiations resume Friday,” Su said.
“The market is also worried about potential new 25 percent tariffs on an additional US$325 billion worth of Chinese goods as U.S. President Donald Trump threatened Sunday.”
Su said the electronics sector continued to dominate the movement of the broader market throughout the session Friday. The sub-index for the sector closed down 0.37 percent at 439.41, off a high of 445.33.
Among the falling large cap tech stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, fell 0.19 percent to close at NT$256.00, with 18.60 million shares changing hands, after hitting a high of NT$259.00.
iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market cap, lost 0.71 percent to end at NT$83.70, off a high of NT$85.60, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.02 percent to close at NT$4,455.00 amid optimism over its sales in May.
“With the electronics sector in the doldrums, some investors moved their funds to old economy and financial stocks as a safe haven,” Su said.
Among the gaining old economy stocks, food brand Uni-President Enterprises Corp. rose 1.05 percent to close at NT$77.30, Formosa Chemicals & Fibre Corp. added 0.94 percent to end at NT$107.00, and Formosa Plastics Corp. gained 0.92 percent to close at NT$109.50.
In the financial sector, which closed up 0.05 percent, CTBC Bank rose 1.68 percent to end at NT$21.20, and Shanghai Commercial & Savings Bank added 0.80 percent to close at NT$50.70, while Cathay Financial Holding Co. fell 0.69 percent to end at NT$43.20.
According to the TWSE, foreign institutional investors sold a net NT$3.78 billion in shares Friday.
“While foreign institutional investors dumped their holdings today, I’m guessing government-led funds stood on the buy side to prevent the Taiex from falling further at a time of rising trade tensions,” Su said.
“The market is still facing stiff technical resistance ahead of 10,800 points for the moment,” he added.
(By Frances Huang)