Taipei, Shares in Taiwan closed slightly higher Tuesday as select electronics heavyweights continued their momentum from a session earlier to help the main board offset the impact of losses suffered by nontech stocks, dealers said.
Turnover remained moderate as many investors preferred to stay on the sidelines during the ongoing earnings season at home and on Wall Street. Since it remained ahead of the critical 11,000point level, investors tended to hold a cautious attitude, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 9.62 points, or 0.09 percent, at 10,886.05, after moving between 10,865.00 and 10,899.84, on turnover of NT$117.13 billion (US$3.78 billion).
The market opened down 0.11 percent and moved to the day's low as investors locked in gains posted a session earlier, when the Taiex closed up 0.43 percent, in the wake of a small swing on Wall Street, where the Dow Jones Industrial Average closed up 0.10 percent, the dealers said.
But around 9:30 a.m., buying emerged as large cap tech stocks, including iPhone assembler Hon Hai Precision Industry Co. and contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), vaulted the main board back into positive territory by the end of the session, they said.
"Thanks to these tech heavyweights, the local main board recouped its earlier losses at the end of the session, although the gains were limited during the current earnings season," Concord Securities analyst Alex Huang said.
Among the gaining heavyweight tech stocks, TSMC, the most heavily weighted stock in the local market, rose 0.59 percent to close at NT$256.00, with 21.30 million shares changing hands, after a 1.60 percent increase a session earlier.
Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., added 1.31 percent to end at NT$4,260.00, while Hon Hai, the world's largest contract electronics maker, gained 2.43 percent to close at NT$80.00.
"Hon Hai's gains gave a real boost to the broader market, as investors had high hopes that founder Terry Gou will be able to spend more time on the company's operations after he lost the opposition Kuomintang (KMT) presidential primary yesterday," Huang said.
Gou announced his presidential bid in midApril and stepped down from his position as Hon Hai's chairman in June to pursue a change in his career to politics from business. The market had concerns about Hon Hai's operations without the strongwilled Gou after the announcement.
The bellwether electronics sector closed up 0.25 percent and the semiconductor subindex ended up 0.22 percent.
Huang said that as market attention focused on large electronics stocks, nontech stocks largely remained in the doldrums throughout the session.
Among the old economy stocks, Formosa Plastics Corp. lost 1.42 percent to close at NT$104.00 and Formosa Petrochemical Corp. fell 0.46 percent to end at NT$107.50 after a fall in international crude prices, as production in the Gulf of Mexico began poststorm recovery.
In the financial sector, which closed down 0.10 percent, E. Sun Financial Holding Co. lost 0.55 percent to end at NT$27.35, Fubon Financial Holding Co. lost 0.34 percent to close at NT$44.00 and Cathay Financial Holding Co. dropped 0.24 percent to end at NT$41.60.
"With the Taiex moving closer to the 11,000point mark, investors were wary of a possible pullback after the main board attempted to stand well above that level but failed several times in recent months," Huang said.
"Moreover, investors remained reluctant to chase prices for the moment before the U.S. Federal Reserve holds a twoday policymaking meeting at the end of this year to see whether the central bank will kick off a rate cut cycle as the market has expected," Huang added.
Huang said the market has widely anticipated that the Fed will cut its key interest rates once or even twice by the end of this year, and the first cut could be in July.
According to the TWSE, foreign institutional investors bought a net NT$62.49 millionworth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel