Taipei-Shares in Taiwan closed little changed Wednesday, while contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, continued to rise and hit a new high on its sound fundamentals, dealers said.
With the main board posting solid gains in recent sessions, many investors grew cautious about a possible technical pullback soon, which put the market in consolidation mode throughout the trading session, dealers said.
Investors are also reining in their buying until the United States and China sign a formal agreement to resolve some of their trade disputes, dealers said.
The weighted index on the Taiwan Stock Exchange (Taiex) closed up 9.04 points, or 0.08 percent, at 11,653.07, after moving between 11,601.70 and 11,668.20. Turnover totaled NT$159.26 billion (US$5.24 billion) during the session.
The market opened up 1.05 points on follow-through buying from the previous session but moved into consolidation mode due to the limited gains on Wall Street Tuesday, when the Dow Jones Industrial Average closed up 0.10 percent, dealers said.
Amid cautious sentiment, the Taiex fluctuated, but as large cap stocks such as TSMC and iPhone assembler Hon Hai Precision Industry Co. continued to gain momentum, they helped to stabilize the main board, dealers said.
"After its recent strong showing, the local main board took a pause today, but the Taiex managed to end above the 11,600 point mark after recouping its early losses," Mega International Investment Services Corp. analyst Alex Huang said.
Since the beginning of October, the Taiex has soared 823.39 points, or 7.60 percent, largely on strong buying by foreign institutional investors.
According to Taiex data, foreign institutional investors bought a net NT$6.78 billion worth of shares on the main board Wednesday, marking the 18th consecutive session of a net buy.
"Whether and how soon the local main board will make another takeoff depends how much foreign institutional investors spend to pick up local equities," Huang said.
On Wednesday, TSMC maintained its uptrend, helping the broader market come off an early low of NT$308.00.
Amid optimism over TSMC's global lead in high-end technology processes, the stock rose 0.16 percent to close at a record high of NT$311.00. Due to the upturn, TSMC's market capitalization also hit its highest level of NT$8.06 trillion.
Foreign institutional investors registered a net buy of TSMC shares for the 13 consecutive trading sessions, in reflection of the chipmaker's healthy fundamentals.
Among other gaining tech heavyweights, Hon Hai added 0.44 percent to end at NT$90.40 after the company reported record high October sales of NT$595.88 billion, up 1.04 percent from a year earlier and 1.38 percent from a month earlier.
Also in the electronics sector, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.84 percent to close at NT$4,700.00, while rival Genius Electronic Optical Co. dropped 2.47 percent to end at NT$455.00.
The financial sector, meanwhile, attracted bargain hunting, rising 1.2 percent and helping to support the broader market, dealers said.
Cathay Financial Holding Co. rose 3.74 percent to close at NT$43.00, Fubon Financial Holding Co. gained 2.00 percent to end at NT$45.85, and Mega Financial Holding Co. finished 1.49 percent higher at NT$30.65.
Old economy stocks, however, largely saw profit taking, with food brand Uni-President dropping 1.71 percent to end at NT$74.70, Eclat Textile Co. falling 1.26 percent to close at NT$391.00, and Formosa Chemicals and Fibre Corp. sliding 0.88 percent to finish at NT$89.90.
Huang said that while investors were waiting for a signed agreement between Washington and Beijing, his outlook was upbeat based on recent positive leads.
For example, he said, Washington is considering granting permission to American companies to sell products to Chinese telecom equipment supplier Huawei Technologies Inc., he said.
"If there's any technical correction on the Taiex, it may see strong technical support at around the 10-day moving average of 11,450 points," Huang said. (Chang Chien-chung and Frances Huang)
Source: Focus Taiwan News Channel