Taipei, Shares in Taiwan closed higher Monday as the bellwether electronics sector steamed ahead with iPhone assembler Hon Hai Precision Industry Co. leading the way, dealers said.
Investors were bullish on Hon Hai's Shanghai listing of subsidiary Foxconn Industrial Internet Co. Ltd. (FII), and momentum in Hon Hai shares spread to smartphone camera lens maker Largan Precision Co., another major Apple supplier, dealers said.
Their gains helped the broader market offset the losses posted by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the Taiwan Stock Exchange.
Also providing support was the petrochemical sector, which shrugged off a fall in international crude oil prices to push higher, they said.
The weighted index on the Taiwan Stock Exchange, or the Taiex, ended 45.47 points, or 0.42 percent, higher at 10,987.77, after moving between 10,965.18 and 10,999.43, on turnover of NT$139.37 billion (US$4.66 billion).
The market opened up 0.31 percent on follow-through buying from a session earlier, and remained above the previous closing level for the rest of the session.
But the Taiex was confined to a narrow trading range and failed to breach the psychologically important 11,000-point level amid lingering geopolitical tensions and caution over the U.S. Federal Reserve's policymaking meeting in mid-June, dealers said.
"A lot of investors are watching whether a summit between U.S. President Donald Trump and North Korean leader Kim Jong-un will be held in June as scheduled," Hua Nan Securities analyst Kevin Su said.
"It was no surprise that the Taiex failed to breach the critical 11,000-point mark today even though it moved higher."
Su said Hon Hai, second to TSMC in terms of market value, served as an anchor for the broader market, after FII formed a strategic partnership with e-commerce operator Alibaba Group Holding Ltd., search engine Baidu Inc. and online services provider Tencent Holdings Ltd. through a share placement ahead of its IPO.
"The ties with the three Chinese Internet giants could trigger buying in FII shares when its shares are listed on the Shanghai Stock Exchange," Su said. FII has not announced an exact timetable for the listing.
Hon Hai gained 2.66 percent to close at NT$88.80, with 64.83 million shares changing hands, on a day the electronics sector closed up 0.63 percent.
Also in the electronics sector, Largan rose 2.25 percent to end at NT$4,085.00, and PC brand Asustek Computer Inc. added 1.09 percent to close at NT$277.50.
Bucking the upturn in the electronics sector, TSMC fell 0.66 percent to close at NT$227.00, but Hon Hai's gains helped the broader market fend off downward pressure suffered by TSMC, Su said.
In the petrochemical sector, which also helped drive the market's gains, Formosa Plastics Corp. gained 1.38 percent to close at NT$110.00, and Formosa Chemicals & Fibre Corp. added 1.74 percent to end at NT$117.00.
"In addition to geopolitical concerns, there were concerns about the upcoming Fed meeting even if the market has widely anticipated the U.S. central bank will raise its key interest rates," Su said.
Source: Focus Taiwan News Channel