Taiwan shares end flat ahead of GDP forecast update (Taiwan News)

Taipei, Aug. 14 (CNA) Shares in Taiwan closed little changed Friday amid cautious sentiment ahead of the release of an updated forecast of Taiwan’s gross domestic product (GDP) for 2015 after the country reported disappointing GDP growth for the second quarter, dealers said. The construction and financial sectors outperformed the broader market after the central bank eased credit controls in the local property market, while the semiconductor sector trended lower after Taiwan Semiconductor Manufacturing Co. (TSMC, ???) witnessed its weighting cut in the MSCI indexes, the dealers said. The weighted index on the Taiwan Stock Exchange closed down 6.10 points, or 0.07 percent, at 8,305.64, after moving between 8,283.35 and 8,343.98 on turnover of NT$71.97 billion (US$2.24 billion). The market opened up 1.35 points and rose to the day’s high on follow-through buying from a session earlier, but with the index moving closer to the nearest technical resistance level ahead of 8,400 points, some investors shifted to the sell side to dump their holdings in select high-tech stocks, including TSMC, which dragged down the index into negative territory, the dealers said. “Many investors remained wary of the local economic climate amid fears that the government will sharply cut its forecast for the country’s GDP forecast,” KGI Securities analyst Phil Chu said. In the second quarter, the economy grew only 0.64 percent from a year earlier, lagging far behind the government’s previous estimate of a 3.05 percent increase due to weaker-than-expected exports. Market analysts have anticipated that the government will cut its forecast from an estimate of 3.28 percent growth made in May. “So even if the index rose initially today, concerns over the local economy kept many investors from chasing prices for the moment. When the equity market posted gains, they tended to rush to lock in profits,” Chu said. “After recent sell-offs, investor confidence has been hurt badly. Unless the market stages a meaningful rebound, they will not buy,” he said. “Consolidation is expected to dominate the local market in the near future.” The semiconductor sector closed down 1.28 percent and the electronics sub-index ended down 0.68 percent after TSMC, the most heavily weighted stock in the local market, fell 1.56 percent to close at NT$126.00. Contract chip maker TSMC’s weighting in the MSCI indexes has been cut by 0.06 percent after a quarterly index review of the international index provider. The downgrade faced by TSMC was the steepest among the Taiwanese stocks whose weighting was lowered by MSCI. Among other semiconductor stocks, chip maker United Microelectronics Corp. (??) closed unchanged at NT$11.20, while integrated circuit designer MediaTek Inc. (???) shed 3.40 percent to end at NT$270.00. The property sector and financial sector closed up 2.13 percent and 1.33 percent, respectively, after the central bank eased credit controls to allow home buyers to secure a higher ratio of mortgages to home value under certain circumstances. In the property sector, Highwealth Construction Corp. (???) added 6.42 percent to close at NT$61.30 and Shining Building Business Co (??) rose 4.46 percent to end at NT$11.70. Among the gaining financial stocks, CTBC Financial Holding Co. (???) rose 1.28 percent to close at MNT$19.85 and E. Sun Financial Holding Co. (???) added NT$4.61 percent to end at NT$19.30. (By Frances Huang)