Shares in Taiwan closed little changed Thursday, as earlier gains were eroded by stiff technical resistance after the weighted index breached the 9,200-point mark, dealers said.
A decision overnight by the U.S. Federal Reserve to leave its key interest rates unchanged was factored into local share prices, so investors here tended to lock in gains they had built up in recent sessions after the market moved higher initially Thursday, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 6.76 points, or 0.07 percent, at 9,235.26, after moving between 9,207.41 and 9,290.76, on turnover of NT$70.49 billion (US$2.24 billion).
The market opened up 0.40 percent and rose to the day's high in a knee-jerk reaction to a higher Wall Street, where the Dow Jones Industrial Average closed up 0.90 percent and the S&P 500 index ended 1.09 percent higher on the Fed's decision, the dealers said.
However, selling followed, as investors were afraid of a possible correction after the index had vaulted past the 9,200-point mark since Wednesday, and rushed to push down the broader market into negative territory. The index moved in a narrow range for the rest of the session, they said.
In the last few minutes of the session, select large-cap stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC,???) attracted bargain hunters, helping the broader market to end above the previous closing level, they added.
"The Fed's decision had been widely anticipated here," Mega International Investment Services Corp. analyst Alex Huang said. "The gains posted in the local market reflected such expectations. It was no surprise that some profit taking emerged during trading today."
"Moreover, concern about a rate hike by the Fed in December have been running deeper after the U.S. central bank left interest rates unchanged yesterday," Huang said, referring to a Fed statement that said the U.S. labor market has continued to strengthen and the economic momentum has picked up.
The local main board staged a strong rebound of 2.81 percent Monday, and continued to move higher in the following sessions. Prior to Thursday, the weighted index had added 3.66 percent for the week so far. "The local equity market simply took a breather today, with many large-cap stocks moving in a narrow range during most of the session, and turnover remained thin," Huang said.
The bellwether electronics sector closed up only 0.05 percent, as interest in most Apple concept stocks faded, while the financial sub-index ended 0.02 percent lower.
Among the Taiwanese suppliers to Apple Inc., smartphone camera lens maker Largan Precision Co. (???) shed 1.69 percent to close at NT$3,775.50, and Hon Hai Precision Industry Co. (??) lost 0.50 percent to end at NT$79.60.
On the back of the buying in the late session, TSMC, the world's largest contract chip maker, rose 0.82 percent to end at the day's high of NT$185.50, which pushed the weighted index back into the black at the end of the session.
TSMC closed at a record high and its market capitalization also smashed its past record to reach NT$4.81 trillion Thursday on hopes that the chip maker will benefit from solid demand for smartphone chips in the current peak season.
In the financial sector, Mega Financial Holding Co. (???) fell 0.89 percent to close at NT$22.30, while Cathay Financial Holding Co. (???) rose 0.25 percent to end at NT$40.60.
Source: Focus Taiwan News Channel