Shares in Taiwan closed slightly higher Friday after coming off a historical intraday high ahead of stiff technical resistance around the critical 18,000 point level.
Turnover remained thin as many foreign institutional investors retreated from the trading floor for the Christmas and New Year holidays, resulting in large-cap tech stocks moving in a narrow range throughout the trading session, according to dealers.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 14.98 points, or 0.08 percent, at 17,961.64, after moving between 17,953.57 and 18,039.85. Turnover totaled NT$242.54 billion (US$8.74 billion).
The market opened up 0.11 percent and buying increased to push up the Taiex to hit a historic high in the morning session, as investors were encouraged by the gains posted on the U.S. markets where the Dow Jones Industrial Average rose 0.55 percent and the tech-heavy Nasdaq index gained 0.85 percent overnight.
The bellwether electronics sector led the initial gains before investors shifted to the sell side. This saw them lock in their earlier gains built for select large-cap stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), to erode the upturn on the broader market, dealers said.
The electronics sector fell 0.01 percent to close at 860.96 after coming off a high of 865.89, with the semiconductor sub-index down 0.04 percent.
“Today was another quiet trading session due to the absence of foreign institutional investors and buying was capped ahead of 18,000 points,” Mega International Investment Services Corp. analyst Alex Huang said.
“Due to the low turnover, it was hard for heavyweight stocks to make any breakthrough. That’s why big stocks like TSMC failed to sustain their earlier gains,” Huang said.
“As the tech sector fell from a high, the broader market simply followed suit,” Huang said.
Friday’s intraday high beat the previous record intraday high of 18,034.19 seen on July 15.
TSMC, the most heavily weighted stock in the local market, fell 0.33 percent to close at NT$604.00 after hitting a high of NT$609.00.
“The NT$600 level could serve as TSMC’s nearest technical support if the stock faces volatility, while high technical hurdles are expected ahead of NT$620. But such consolidation mode is technical in nature as the chipmaker is fundamentally healthier,” Huang said.
Among other large-cap semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, rose 0.63 percent to end at NT$64.30 after coming off a high of NT$64.90. Meanwhile, dynamic random access memory chip supplier Nanya Technology Corp. lost 0.26 percent to close at NT$75.70, and Novatek Microelectronics Corp., which supplies drive ICs for flat panels, lost 1.49 percent to end at NT$530.00.
Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co. fell 1.04 percent to close at NT$104.00 after hitting NT$105.00, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc. lost 0.61 percent to end at NT$2,445.00, off a high of NT$2,500.00.
“Old economy stocks followed the same pattern as their tech counterparts as investors appeared reluctant to chase prices for the moment,” Huang said.
In the steel sector, which lost 0.46 percent, Chung Hung Steel Corp. lost 2.30 percent to close at NT$42.55, and China Steel Structure Corp. shed 2.90 percent to end at NT$60.20. Meanwhile, China Steel Corp., Taiwan’s largest steelmaker, gained 0.14 percent to close at NT$35.55.
The transportation sector dropped 0.14 percent with Wan Hai Lines Ltd. down 0.50 percent to close at NT$199.00, while Evergreen Marine Corp., the largest container cargo shipper, and Yang Ming Marine Transport Corp. ended unchanged at NT$139.00 and NT$122.50, respectively.
Outperforming the broader market, the paper sector soared 3.33 percent on the back of an announced hike in toilet paper prices by major brands, dealers said.
Chung Hwa Pulp Corp. jumped 7.13 percent to close at NT$25.55, while YFY Inc. gained 3.94 percent to end at NT$35.60, and Cheng Loong Corp. added 2.43 percent to close at NT$35.90.
“Unless turnover expands to NT$400 billion or higher, the Taiex will not have a chance to end well above 18,000 points. But, before foreign institutional investors return, it is unlikely,” Huang said.
According to the TWSE, foreign institutional investors bought a net NT$8.60 billion worth of shares on the main board.
Source: Focus Taiwan News Channel