Dealers say that Taiwan shares, after falling into consolidation, resulted in being slightly higher as large-cap stocks fell into depression.
Reduce in turnover occurred because of tensions between the US and China after new taxes were imposed by both parties on each other’s products, effective from Sunday. Moreover, the continuous commotion going on in Hong Kong has caused many investors to turn away from trading.
The weighted index on the Taiwan Stock Exchange (TWSE) ended up 16.80 points, or 0.16 percent, at the day’s high of 10,634.85, off an early low of 10,589.42, on turnover of NT$104.833 billion (US$3.35 billion).
Buying accelerated towards smaller tech stocks and major old economy stocks in the later trading session when the TWSE jumped 1.49%. This caused the entire market to become a positive territory.
Tony Huang, an analyst at Taishin Securities Investment Advisory, said that trade issues between powerful nations always dominate the world’s markets, just like they dominated Taiwan.
US-China talks are scheduled in September, in hopes of resolving trade conflicts between the two. However, Huang said that he doesn’t see agreements happening anytime soon.
Local investors started focusing on their future moves when TWSE moved above 10,600 points on Friday. The investors played it safe with their decisions.
Reduced turnover cause electronics stocks to appear as if they’re slacking, which as a result made investors reluctant to chase the prices. Other falling large-cap stocks included iPhone assembler, Hon Hai Precision Industry Co., and Largan Co., a supplier of smartphone camera lenses to Apple Inc. however, smaller tech stock still appeared to be active, and this drew investors towards them, helping the market.
Investors were looking for a place to save their money rather than losing it, hence turning towards the old economy sector.
Huang added that the commotion in Hong Kong caused by pro-democracy rallies will send tremors through the global market, causing many investors to be worried about their stocks.
The Foreign Institutional Investors bought a net NT$3.93 billion worth of shares on the main board Monday.