Shares in Taiwan moved higher Wednesday after bouncing back from a slump seen a session earlier as investors left behind the losses suffered by the U.S. markets overnight.
Turnover, however, was reduced to below NT$300 billion (US$10.79 billion) as many investors appeared hesitant to trade ahead of the outcome of a two-day policymaking meeting of the U.S. Federal Reserve due early Thursday morning Taipei time, according to dealers.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 60.73 points, or 0.35 percent, at 17,660.10, after moving between 17,556.87 and 17,678.78.
Turnover totaled NT$247.41 billion, down from Tuesday’s NT$307.92 billion.
The market opened down 6.50 points and soon moved to the day’s low, falling only 42.50 points, or 0.24 percent, despite the losses on the U.S. markets, where the Dow Jones Industrial Average fell 0.30 percent and the tech-heavy Nasdaq index lost 1.14 percent Tuesday.
The Taiex soon regained its footing as buying rotated to select old economy stocks, in particular in the shipping industry.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), meanwhile, was the beneficiary of last-ditch buying, which pushed the main board back into positive territory by the end of the session.
“The Taiex fell yesterday in the inflection of uncertainty resulting from the Fed meeting, ahead of the U.S. losses, so it staged a rebound today,” Mega International Investment Services Corp. analyst Alex Huang.
On Tuesday, the local main board lost 168.23 points, or 0.95 percent.
“Despite the gains in the index, turnover shrank as many investors stayed on the sidelines waiting for the conclusion of the Fed meeting,” Huang said.
He added that “as inflationary pressure is running high in the U.S., many investors at home and abroad have feared the U.S.’ central bank will speed up its pace to kick off a rate hike cycle.”
Amid ample liquidity, rotational buying remained active with large-cap shipping stocks in focus. “These shipping stocks had been hit badly, falling from their recent highs, so bargain hunters simply rushed to pick them up,” according to Huang.
In the transportation sector, which rose 3.58 percent, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 3.76 percent to close at NT$138.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 2.08 percent and 5.01 percent, respectively, to end at NT$122.50 and NT$199.00.
Airlines stocks also moved higher, with China Airlines up 5.02 percent to close at NT$27.20, and EVA Airways up 4.01 percent to end at NT$27.25.
As for the tech sector, TSMC, the most heavily weighted stock in the local market, rose 0.17 percent to close at NT$600.00 after hitting a low of NT$597.00 as late-session buying helped return the stock into positive territory.
“But, due to reduced turnover, it was not easy for tech heavyweights like TSMC to make a significant comeback anytime soon,” Huang said.
Among other large tech stocks, United Microelectronics Corp., a smaller contract chipmaker relative to TSMC, rose 0.48 percent to end at NT$62.70, while integrated circuit designer MediaTek Inc. lost 0.93 percent to close at NT$1,060.00.
After lagging behind the broader market in recent sessions, flat-panel makers AU Optronics Corp. soared 6.26 percent to end at NT$22.90, and Innolux Corp. also gained 3.51 percent to close at NT$19.15.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.48 percent to end at NT$105.00.
Elsewhere, Nan Ya Plastics Corp. gained 0.96 percent to close at NT$83.80, while Formosa Plastics Corp. shed 1.45 percent to end at NT$102.00.
In the financial sector, which underperformed relative to the broader market after falling 0.37 percent overall, Cathay Financial Holding Co. lost 0.66 percent to close at NT$59.80, while Fubon Financial Holding Co. dropped 0.40 percent to end at NT$74.60.
“Today was another quiet day as many foreign institutional investors have been away from the trading floor for the Christmas holiday,” Huang said, adding that “light trading is expected to continue into the end of the year.”
Despite the gains in the Taiex, foreign institutional investors bought a net NT$6.18 billion worth of shares on the main board Wednesday, according to the TWSE.
Source: Focus Taiwan News Channel