Taipei, Shares in Taiwan staged a mild technical rebound from a session earlier to end higher Tuesday as buying rotated to select old economy and financial stocks and the bellwether electronics sector came off an early low, dealers said.
Turnover shrank as many investors were reluctant to chase prices for the moment, with tech heavyweights at home and in the U.S. set to hold investor conferences. At the same time, market sentiment remained cautious ahead of the conclusion of a U.S. Federal Reserve policymaking meeting later this week, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 28.67 points, or 0.26 percent, at 10,967.73, after moving between 10,910.78 and 10,978.10, on turnover of NT$103.41 billion (US$3.35 billion). Monday's turnover stood at NT$121.16 billion.
The market opened up 6.88 points on a rebound from the previous session, when the Taiex closed down 0.12 percent, as investors were encouraged to pick up local equities by the upturn on U.S. markets, where the S and P 500 hit a new high, up 0.11 percent, and the techheavy Nasdaq index ended up 0.19 percent overnight, dealers said.
However, as the main board approached the 11,000 point mark, the Taiex faced some selling and fell into negative territory at one point before late session buying emerged to push the index back up by the end of the session, they said.
"Again, there has been stiff technical resistance ahead of the 11,000 point mark," Hua Nan Securities analyst Kevin Su said. "Technically speaking, more time is needed for the main board to absorb the pressure before jumping over the hurdles."
"The ongoing earnings season in Taiwan and the U.S. has made many investors nervous, in particular before certain tech heavyweights release their first quarter results and give second quarter guidance," Su said. "Such caution dragged down today's turnover."
Among the major tech firms, Apple Inc., which is one of the largest clients of many Taiwanese suppliers, is scheduled to hold an investor conference later Tuesday.
In the bellwether electronics sector, which benefited from late session buying and recovered from an earlier low to close up 0.18 percent, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, fell 0.19 percent to end at NT$259.00 after hitting a low of NT$258.00.
iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization, lost 1.03 percent to close at NT$86.90, off an early low of NT$86.10.
Outperforming the broader market, integrated circuit designer MediaTek Inc., which will release its first quarter results after the market closes Tuesday, gained 2.78 percent to close at the day's high of NT$295.50.
Active rotational buying provided support to select old economy and financial stocks, helping to stabilize the broader market throughout the session, dealers said.
Among the gaining old economy stocks, shares in food brand UniPresident Enterprises rose 0.82 percent to close at NT$73.40, Yulon Nissan Motor Co. added 0.97 percent to end at NT$259.00, and Hotai Motor Co. added 4.01 percent to close at NT$467.00.
In the financial sector, which ended up 0.48 percent, CTBC Financial Holding Co. rose 1.20 percent to close at NT$21.15, and Mega Financial Holding Co. added 1.02 percent to end at 29.65 percent, while Fubon Financial Holding Co. fell 0.22 percent to close at NT$45.60.
"Investors had better pay close attention to the upcoming twoday policymaking meeting scheduled to start later today for its comments on how the U.S. economy is evolving, which is expected to impact investors' sentiment worldwide," Su said.
While any technical rebound will see a cap at around 11,000 points, Su said, the Taiex could see some short term technical support at the 20day moving average of around 10,892 points.
According to the TWSE, foreign institutional investors bought a net NT$1.51 billion worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel