Taipei, Shares in Taiwan closed flat Wednesday after late session buying boosted select large cap stocks to help the broader market recoup most of its earlier losses, dealers said.
While the bellwether electronics sector remained sluggish, the financial sector, which had lagged behind in recent sessions, got a boost from bargain hunting to stabilize the market, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended down 2.38 points, or 0.02 percent, at 10,389.17, after moving between 10,343.56 and 10,403.05. Turnover was NT$133.16 billion (US$4.32 billion).
The Taiex opened down 5.74 points but soon regained its footing to breach the 10,400-point mark early in the session before selling set in, especially in the tech sector, to push the Taiex into negative territory, dealers said.
The index then continued below the previous day's closing level for much of the trading day before some buying re-emerged late in the session to recover most of the ground lost earlier, they said.
"Today's narrow fluctuations showed caution toward the slower pace of economic growth at home and abroad," Mega International Investment Services Corp. analyst Alex Huang said.
"Since optimism toward a possible deal between the United States and China to resolve their trade dispute has been largely factored into share prices, investors shifted their attention back to economic fundamentals," Huang said.
On Feb. 13, Taiwan's statistics bureau lowered its forecast for Taiwan's 2019 economic growth to 2.27 percent, down from the 2.41 percent increase it projected last November.
"Fortunately, bargain hunters remained active to pick up certain market heavyweights late in the session, which allowed the Taiex to end flat," Huang said.
"The bargain hunting was sparked by foreign institutional investors' net buying in recent sessions."
According to the TWSE, foreign institutional investors bought a net NT$4.52 billion in shares on the market Wednesday after a net buy of NT$60.20 billion in shares during the previous sessions in February.
The bellwether electronics sector ended down 0.21 percent at 418.30 points, but late session buying pulled it back from an early low of 415.98.
Among the large cap tech stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, lost 0.21 percent to close at NT$239.00, after hitting a low of NT$237.00.
TSMC shares came under pressure because of MSCI's latest adjustments in its MSCI index weightings.
MSCI cut the weighting of 16 Taiwanese stocks in the MSCI Taiwan Index earlier this month following a quarterly index review, with TSMC suffering the steepest reduction.
The downgrade took effect after the market closed Wednesday.
Meanwhile, MSCI raised Taiwan's weighting in its three major indexes and the adjustments also became effective after the market closed Wednesday.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 0.14 percent to close at NT$72.70, off an earlier low of NT$72.30, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., gained 0.69 percent to end at NT$4,360.00.
The financial sector outperformed the broader market, closing up 0.54 percent to stabilize the Taiex, Huang said.
Shanghai Commercial and Savings Bank rose 6.68 percent to end at NT$47.90 after MSCI added the stock to the MSCI Global Standard Indexes.
"After recent gains in the Taiex, there is limited room for the index to move higher in the short term as the market is expected to encounter strong resistance ahead of 10,500 points," Huang said.
Source: Focus Taiwan News Channel