Taiwan stocks closed flat on Tuesday, weighed down by tourism and tech shares, but transport shares rallied ahead of an agreement with China to launch daily cross-strait flights and direct cargo links. The main TAIEX share index slipped 0.05 percent, or 2.43 points to close at 4,992.63, after briefly flirting with the 5,000-point psychological barrier minutes before the market closed.
The tourism and electronics sub-indexes fell 0.32 percent and 0.29 percent, respectively. "Profit-takers controlled much of the morning today," said Tu Jin-lung, chairman of Grand Cathay Investment Services. "This is very normal, especially when you remember that the index has risen more, almost 900 points in the past few days and we are seeing little direction from US stocks," Tu said. The TAIEX has risen more than 13 percent in the previous three sessions, while the financial and tourism sub-indexes have rallied about 20 percent in the past five sessions. Turnover was light at T$74.3 billion ($2.26 billion), but higher than the average level on most trading days in October.
DRAM chip makers Powerchip and Nanya Tech led the slide, with both companies falling by close to their 7 percent daily limit less than 20 minutes into morning trade as they struggled to fight off a bleak industry outlook.
Local media reports that China's top envoy for Taiwan affairs, Chen Yunlin, would visit the office of LCD maker AU Optronics also failed to lift the company's share price. AU shares closed 1.44 percent lower.
Electronics parts maker Hon Hai, smartphone maker HTC Corp and PC vendor Asustek all fell more than 1 percent as investors steered clear of them amid weak consumer sentiment heading into the Christmas shopping season. The broader transport sub-index bucked the day's trend to climb by more than 2 percent, as various initiatives to improve transport links between Taiwan and the mainland were leaked to the local media.
Shipping lines Evergreen International and Yang Ming Marine were the main beneficiaries, both of which rose by their 7 percent daily limit. They received further support after China said it would allow direct sea cargo between 11 Taiwan ports and 63 Chinese destinations, ending a ban due to sovereignty concerns. PC vendor Acer continued its rally for a second day, rising more than 3 percent after it issued an optimistic fourth-quarter guidance on the back of it notebook sales.
China Airlines and Eva Airways ended their six-day rally to fall by more than 6 percent after issuing a third-quarter loss. Synnex Technology, the world's No 3 electronics distributor, fell 1.6 percent. Synnex President Evans Tu told Reteurs on Tuesday his company would spend up to T$2 billion next year to expand in China as it aims to double its handset unit sales there.
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