Taipei, Shares in Taiwan closed higher on Tuesday as buying rotated to contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, dealers said.
But technical resistance ahead of 10,700 points and concerns of geopolitical tensions if American President Donald Trump announces the United States' withdrawal from a nuclear agreement with Iran kept the day's gains in check, they said.
The weighted index on the Taiwan Stock Exchange, the Taiex, ended up 86.47 points, or 0.82 percent, at the day's high of 10,691.38, off an early low of 10,609.04, on turnover of NT$131.18 billion (US$4.40 billion).
The market opened up 5.53 points as investors followed the lead of markets in the U.S., where the Dow Jones Industrial closed 0.39 percent higher.
But momentum picked up after around 9:30 a.m., pushing the Taiex closer to the 10,700-point mark as buying rotated to select "Apple concept stocks," led by TSMC, they said.
"After Apple released its better than expected January-March earnings last week, investors rushed to pick up local Apple suppliers, which had been hammered in recent sessions," Mega International Investment Services Corp. analyst Alex Huang said.
"Today, it was TSMC's turn as buying rotated from Largan to boost the Taiex throughout the session," Huang said.
TSMC rose 2.01 percent to close at NT$228.00, with 40.30 million shares changing hands on Tuesday after a mild 0.22 percent increase seen a session earlier.
Largan Precision, which supplies smartphone camera lenses to Apple and is the most expensive stock in Taiwan, fell 0.25 percent to end at NT$3,990.00 after increasing by the daily maximum of 10 percent on Monday.
Interest was also seen in shares of iPhone assembler Hon Hai Precision Industry Co., which gained 1.23 percent to close at NT$82.60, and Flexium Interconnect Inc., a printed circuit board supplier to Apple, which added 3.61 percent to end at NT$86.00.
"I suspect today's buying largely came from government-led funds, which aimed to boost local share prices ahead of May 20, Huang said, referring to the two-year anniversary of President Tsai Ing-wen's (???) inauguration.
According to the TWSE, foreign institutional investors sold a net NT$346.78 million in shares on the main board despite the Taiex's gains on Tuesday.
Buying also spread to large caps in old economy sector, with Asia Cement Corp. up 2.86 percent to end at NT$32.40, Formosa Petrochemical Corp. up 2.53 percent to close at NT$121.50, and textile maker Far Eastern New Century Corp. up 1.07 percent to end at NT$28.40.
"Technically speaking, only when turnover expands to NT$150 billion or higher can the market be expected to clear hurdles ahead of the 120-day moving average of 10,776 points," Huang said.
"Investors should pay close attention to the geopolitical situation as Trump is expected to announce his decision on the nuclear deal by May 12, which could move global financial markets," he said.
Source: Focus Taiwan News Channel