Shares in Taiwan closed lower Friday as investors acted cautiously ahead of a long weekend and sold shares to profit from early gains, dealers said.

Stocks across every sector faced downward pressure after an early upturn, but some large cap stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), saw late buying to limit the broader market’s losses, they said.

The Taiex, the Taiwan Stock Exchange’s (TWSE) benchmark index, ended down 73.43 points, or 0.44 percent, at 16,640.43, after moving between 16,605.49 and 16,771.71. Turnover totaled NT$271.03 billion (US$9.66 billion).

The market opened up 0.17 percent and overcame technical resistance at around the 10-day moving average of 16,746 points to hit the day’s high following roughly 1 percent gains in both the Dow Jones Industrial Average and Nasdaq index overnight.

Selling, focused particularly on steel and shipping stocks, soon set in, however, to push the Taiex into negative territory.

“Compared with other regional markets, which were also lifted by the U.S. markets today, the Taipei market showed weakness after coming off its early gains,” Cathay Future Consulting analyst Tsai Ming-han said, referring to Tokyo, Hong Kong and Shanghai.

“Many investors here preferred to pocket their profits amid fears over possible unfavorable leads from overseas during the long weekend.”

Taiwan’s stock markets will be closed Monday on the final day of the three-day National Day holiday weekend.

“The bright spot was that bargain hunters remained active to pick up select market heavyweights to cap the downturn. But as turnover was thin, their impact appeared limited,” Tsai said.

One of the stocks that saw support late was TSMC, which fell 0.86 percent to close at NT$575.00 after hitting a low of NT$573.00 as some investors used the stock’s large weighting to support the broader market, dealers said.

In line with TSMC’s performance, the electronics index ended down 0.47 percent to end at NT$783.74, off a low of 781.92.

Another stock that received late support was iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization. It closed 0.93 percent higher at NT$108.00.

Also bucking the downward trend in the sector was power management solution provider Delta Electronics Inc., which gained 0.80 percent to close at NT$250.50.

“But many other big tech stocks stayed in the doldrums, suffering heavy losses, as many investors were held back by worries over how other markets would do during the long weekend,” Tsai said.

United Microelectronics Corp., a smaller contract chipmaker, lost 2.24 percent to close at NT$61.10, and integrated circuit packaging and testing services provider ASE Technology Holding Co. fell 4.75 percent to end at NT$96.20.

“The non-tech sector largely also came under pressure after their earlier gains,” Tsai said. “Shipping and steel stocks, in particular, were the targets of investors who simply wanted to hold cash before the holiday.”

In the steel sector, which lost 2.58 percent, China Steel Corp., the largest steel maker in Taiwan, shed 3.77 percent to close at NT$33.20, Chung Hung Steel Corp. fell 3.39 percent to end at NT$37.00, and Kao Hsing Chang Iron & Steel Corp. dropped 2.11 percent to close at NT$18.55.

The transportation sector, where many large shipping stocks are traded, fell 1.24 percent, with Evergreen Marine Corp., Taiwan’s largest container cargo shipper, down 2.44 percent to end at NT$100.00.

Yang Ming Marine Transport Corp. closed 1.73 percent lower at NT$96.80, and Wan Hai Lines Ltd. ended 1.17 percent lower at NT$169.50.

Last ditch buying lifted some petrochemical stocks on higher international crude oil prices, helping the petrochemical sector close 0.14 percent higher.

Nan Ya Plastics Corp. rose 0.66 percent to end at NT$91.30, and Formosa Chemicals & Fibre Corp. added 0.24 percent to close at NT$84.40, while Formosa Plastics Crop. ended unchanged at NT$118.00.

Retail stocks outperformed the broader market on expectations that the NT$5,000 spending vouchers the government started to distribute Friday will push up consumption.

Among them, President Chain Store Corp., which runs the 7-Eleven convenience store chain in Taiwan, rose 0.70 percent to close at NT$287.00, and e-commerce operator momo.com Inc. gained 1.63 percent to end at NT$1,555.00.

“The U.S. is set to release its September non-farm payroll data later today and investors should pay close attention to it as the job numbers may offer hints about the Federal Reserve’s monetary policy. The data could move the global markets,” Tsai said.

According to the TWSE, foreign institutional investors sold a net NT$14.59 billion in shares Friday.

Source: Focus Taiwan News Channel