Taipei-Shares in Taiwan closed higher Wednesday despite investors' caution ahead of a world central bankers' meeting later this week in the United States, dealers said.
Investors have been waiting until the meeting in Wyoming to gain clues on the monetary policy of the world's major central bankers, particularly those in Europe and the U.S., dealers said.
In addition, many local investors have been waiting to see how foreign institutional investors will act after they return from their current summer break, as their strategies often determine the movement of the main board, dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed up 14.74 points, or 0.14 percent, at 10,406.81, after moving between 10,378.01 and 10,458.91. Turn over totaled NT$115.206 billion (US$3.81 billion) during the session.
The market opened up 0.25 percent and soon rose to the day's high on a higher Wall Street, where the Dow Jones Industrial Average rose 0.90 percent and the tech-heavy NASDAQ index gained 1.36 percent Tuesday amid optimism over a planned tax reform, dealers said.
The optimism grew after U.S. President Donald Trump's top aides and congressional leaders reached consensus on a tax overhaul framework, which went beyond the six-paragraph draft released in July.
In Taiwan, investors on Wednesday rushed to pocket their gains after the weighted index breached the 10,400-mark and moved closer to 10,500 points, dealers said.
The selling pushed the weighted index below the previous day's close at one point but bargain hunting emerged, vaulting the index back into positive territory by the end of the session, dealers said.
"Taiwan's market had already moved higher Tuesday ahead of Wall Street's latest rally," Mega International Investment Services Corp. analyst Alex Huang said. "That's why some investors wanted to take profit during the session, particularly amid the cautious sentiment before the central bankers' meeting."
Until then, investors would prefer cash in hand and that is why they took advantage of the higher share prices in the earlier part of Wednesday's session, he said.
The bellwether electronics index closed up 0.26 percent at 442.16, after moving between 440.61 and 444.87.
"Thanks to the late session buying in TSMC (Taiwan Semiconductor Manufacturing Co., ???), the high-tech sector closed in positive territory," Huang said. "It seemed that bargain hunters remained active as they saw the weighted index weakening."
TSMC, the most heavily weighted stock on the local market, gained 0.47 percent to close at NT$215.50, off an early low of NT$214.00, with 11.57 million shares changing hands. Hon Hai Precision Industry Co. (??), second only to TSMC in terms of market capitalization, ended unchanged at the day's low of 115.00 after hitting NT$116.50.
Largan Precision Co. (???) rose 1.34 percent to close at NT$5,680.00, while flat panel maker AU Optronics Corp. (??) fell 1.63 percent to end at NT$12.10.
Among the non-high tech stocks, food brand Uni-President Enterprises Corp. (??) gained 1.66 percent to close at NT$61.40, and Ten Ren Tea Co. (??) rose 1.01 percent to end at NT$35.10 on hopes of strong summer sales.
"Based on past experience, I think foreign institutional investors will return to the trading floor after Aug. 25," Huang said. "Their reaction to the central bankers' meeting is likely to dictate the movement of the local equity market."
Foreign institutional investors bought a net NT$498 million worth of shares on the main board Wednesday, according to the TWSE.
Source: Focus Taiwan News Channel