Taipei-Shares in Taiwan moved higher Tuesday amid reduced concerns over the trade disputes between the United States and China, but the upturn was limited as some investors shifted to the sell side to take profit, dealers said.
Driven by solid buying in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the bellwether electronics sector helped prop up the wider market, although some smaller tech stocks fell, dealers said.
The weighted index on the Taiwan Stock Exchange (Taiex) ended up 18.85 points, or 0.17 percent, at 11,333.87, after moving between 11,292.83 and 11,373,95. Turnover totaled NT$145.34 billion (US$4.76 billion) during the session.
The market opened up 0.29 percent and moved to the day's high in the mid-morning session, as investors were encouraged by the gains Monday on Wall Street, where the Dow Jones Industrial Average closed up 0.49 percent and the S and P 500 index ended 0.56 percent higher on improved sentiment toward global trade, dealers said.
As the Taiex moved closer to the 11,400 point mark, however, some investors began locking in their profits in smaller tech stocks, in particular, but TSMC maintained its momentum, helping the broader market close in positive territory, dealers said.
"The gains in the morning session came after a higher Wall Street overnight due to eased fears over the global trade issue," Concord Securities analyst Kerry Huang said. "That upbeat mood has led more foreign investors to move their funds into the region, buying into equities."
The Office of the U.S. Trade Representative (USTR) said last week that Washington and Beijing were close to finalizing a phase-one deal following their first round of trade talks earlier this month. On Monday, the USTR said the U.S. was considering extending its tariff exclusions on US$34 billion worth of imports from China.
Apart from investors' reduced worry over trade, Huang said, they were also chasing TSMC shares amid optimism about the company's fundamentals and its lead in the global chipmaker market.
TSMC, which holds more than a 50 percent share of the global pure wafer foundry market, has said it will increase its 2019 capital expenditure to improve its high-end technologies.
On Tuesday, the company's stock rose 1.36 percent to close at the day's high of NT$298.50, with 36.62 million shares changing hands. TSMC contributed about 0.33 percent to the rise of the electronics sector and about 40 points to the Taiex's gains.
The buying in TSMC also spread to other semiconductor stocks, dealers said. Among them, United Microelectronics Corp. added 1.75 percent to end at NT$14.50, and integrated circuit designer MediaTek Inc. gained 1.55 percent to close at NT$393.50 on the back of its efforts in 5G technology development.
However, smaller tech stocks in the printed circuit board business, in particular, dropped, with Compeq Manufacturing Co. ending 2.51 percent lower at NT$40.75, and Unimicron Corp. falling 1.26 percent to close at NT$46.90.
Thermal management solution provider TaiSol Electronics Co. slid 5.11 percent to end at NT$92.80.
Huang said the electronics sector accounted for about 78 percent of Tuesday's total turnover, while most old economy and financial stocks remained in the doldrums.
Among the mixed old economy stocks, Formosa Chemical and Fibre Corp. dropped 0.22 percent to close at NT$88.70, Eclat Textile Co. lost 0.85 percent to end at NT$409.00, and Formosa Petrochemical Corp. closed unchanged at NT$96.90.
In the financial sector, which ended up 0.15 percent, Mega Financial Holding Co. rose 0.34 percent to close at NT$29.70, while Shanghai Savings and Commercial Bank ended down 0.19 percent at NT$51.80.
Investors remained cautious ahead of the U.S. Federal Reserve's two-day policymaking meeting that was scheduled to open Tuesday, Huang said.
"Although the market has been anticipating that the Fed will cut interest rates, many investors are waiting for more clues on the current rate cut cycle," Huang said.
TWSE data showed that foreign institutional investors bought a net NT$6.41 billion worth of shares on the main board Tuesday, after a net buy of NT$6.94 billion in the previous session.
Source: Focus Taiwan News Channel